Options Trading News

November 19, 2013  Tue 3:16 AM CT

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.
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