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September 27, 2012  Thu 10:11 AM CT

TWX: SEE CHART GET CHAIN FIND STRATEGIES
Time Warner is just off four-year highs reached last week, and one trader is targeting a floor beneath the stock.

A trader sold 5,950 December 38 puts for the bid price of $0.27, according to optionMONSTER's system. Open interest was 1,637 contracts at the start of the session, so this is a new position.

The put selling is a bet that TWX will remain above $38 through the December expiration, a level that has seen support going back to July. The trader is also showing a willingness to buy shares on a pullback below that level. (See our Education section)

TWX is up 1.9 percent this morning at $45.49. The media giant closed Friday at $45.90, its highest level since September 2008. Shares were below $29 a year ago and broke through resistance at $39 at the start of August.
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Market Level Making You Nervous, Huh? Part 3

In last week's article, we discussed how important the extra cash you save by using the Stock Replacement Strategy over buying the actual stock is! That extra cash in our account instead of being unnecessarily tied up in a stock position allows us to buy the puts we would need to protect our downside in the case of a major sell-off.

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