Options Trading News

December 6, 2013  Fri 11:37 AM CT

A long-term trade is looking for cloud-computing company Workday to make a big move higher or lower in the next two years.

optionMONSTER's Depth Charge system detected the purchase of 5,000 January 2016 40 puts for $2.60 today, dominating WDAY's option volume and already topping its total daily average in the last month. The previous open interest at that strike was just 5 contracts, so this is clearly a new position.

Just after the puts were bought, a block of 40,000 WDAY shares was bought for $82. The combination of stock and options creates a delta-neutral position that is looking for a big move up or down in the shares and/or for volatility to be higher than that implied by the option. (See our Education section)

WDAY is down 0.48 percent to $81.43 this afternoon. The stock has been testing resistance at $82 since closing above that price back in mid-September. It bounced off support at $72 two weeks ago. 
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