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Options Trading News

August 9, 2013  Fri 11:57 AM CT

RIO: SEE CHART GET CHAIN FIND STRATEGIES
Rio Tinto shares are jumping with other materials stocks today, and one large trader is positioning for higher volatility.

More than 41,000 RIO options change hands, compared to a daily average of 2,350. Dominating the action are the October 50 calls.

A trader bought 29,000 of those contracts for the ask price of $1.90. The previous open interest was 1,793, so this is a new opening position.

Just afterward, 1.189 million RIO shares were sold for $48.9781. The combination of stock and options creates an overall position that is delta-neutral and therefore focused on more volatility rather than a specific move up or down.

RIO is up 4.6 percent to $49.6, adding to yesterday's gains. Shares of the U.K.-based miner were at a 52-week low of $39.14 a month ago but are now back to their levels of mid-March.
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It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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