OptionsHouse

Options Trading News

November 19, 2013  Tue 3:16 AM CT

HCP: SEE CHART GET CHAIN FIND STRATEGIES
A trader sees limited upside in HCP, even with the real-estate investment trust near 52-week lows.

optionMONSTER's trade scanners detected the sale of about 4,00 December 40 calls for $0.90 against. Volume was more than 15 times previous open interest at the strike, indicating that new positions were initiated.

Selling calls sets a price where the investor must sell shares in the company, which focuses on health-care properties. Investors use the strategy to earn income on an existing long position in covered calls.

HCP slipped 0.25 percent to close at $39.71 yesterday but was near $40 when the calls were sold. The trader has recovered more than 2 percent of the initial capital outlay and can collect the company's 5 percent annual dividend yield. (See our Education section for more on how to make money from range-bound trading.)

Total option volume was 5 times greater than average in HCP.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »