OptionsHouse

Options Trading News

February 20, 2013  Wed 2:45 AM CT

PCS: SEE CHART GET CHAIN FIND STRATEGIES
A large call spread led yesterday's option activity in MetroPCS.

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.
Share this article with your friends


Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Investor deficiency in premium collection

Most investors have heard about selling options as a form of income generation. You hear it from brokers and financial advisors as a way to generate income without selling off pieces of your nest egg, dwindling through your retirement accounts, and then being stuck figuring out how to financially afford the rest of your life...

View more education articles »