Options Trading News

January 7, 2013  Mon 9:53 AM CT

A large call sale is leading today's option activity in Kinder Morgan even as the stock trades near eight-month highs.

optionMONSTER systems show that almost 11,000 KMI options have already traded, compared to a daily average of 3,400. A single print of 10,000 March 37.50 calls was sold for the bid price of $0.63 in volume that was more than twice the open interest, clearly indicating that this is a new position.

A few minutes after the calls were sold, the largest block of KMI stock traded as 372,911 shares were bought for $36.74. The stock and options are likely tied together as a delta-neutral strategy that can profit if the actual volatility of the stock is less than that implied by the options. (See our Education section)

KMI is up 0.44 percent to $36.87 this morning. The energy-pipeline company is just below Thursday's close, which was the highest since shares came off their 52-week high above $40 back in April.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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