MetroPCS attracting large call spread
Chris McKhann | [email protected]
optionMONSTER systems show that a trader bought 5,000 April 11 calls for $0.49 and sold 10,000 April 12 calls for the bid price of $0.26. The volume was multiples of the previous open interest at each strike before the session began, so this is a new vertical spread in the provider of mobile communications.
The trade, also known as a ratio spread in this case because of the different number of contracts at each strike, will keep the $0.03 credit as profit if shares are anywhere below $11 at expiration in mid-April. The maximum profit comes if PCS is right at $12 at that time. (See our Education section)
PCS was down 0.77 percent to $10.27 yesterday. Friday's close was the highest in two months for the stock, which has been trading around $10 since the end of October. It sits in the middle of its 52-week range, with a low of $5.53 in July and a high of $14.51 in October.