OptionsHouse

Options Trading News

January 7, 2013  Mon 9:53 AM CT

KMI: SEE CHART GET CHAIN FIND STRATEGIES
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.
Share this article with your friends


OptionsHouse

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »