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January 9, 2013  Wed 9:11 AM CT

PCS: SEE CHART GET CHAIN FIND STRATEGIES
A large put strategy dominates today's option trading in MetroPCS Communications as shares gain on the day.

optionMONSTER systems show that 15,000 PCS options have traded, compared to a daily average of 3,500 in the last month. Virtually all of that action was in a three-way put spread.

A trader sold 5,000 January 11 puts for the bid price of $1.50 against open interest of more than 47,000 contracts. Second later he or she bought 5,000 May 10 puts for $1.17 and then sold 5,000 May 8 puts for the bid price of $0.22. The volume at these two strikes was under 700, so that is a new vertical spread.

The trader is closing the in-the-money January puts and rolling the position to the lower strikes in the May spread. He or she takes a profit on the roll, and the $0.95 spent on the $2 spread in May was $0.44 in the money itself. (See our Education section)

PCS is up 2 percent to $9.53. Yesterday's close of $9.33 was its lowest since mid-August. Shares of the wireless carrier traded above $14 briefly at the start of October but have been sliding since.
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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