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November 19, 2013  Tue 3:47 AM CT

ERIC: SEE CHART GET CHAIN FIND STRATEGIES
A large trade is anticipating more volatility in Ericsson through the middle of next year.

Just over 12,000 ERIC options traded, compared to the daily average of 837. optionMONSTER's Heat Seeker system shows that most of that volume was in the July 14 calls, where 10,000 contracts were bought for the ask price of $0.60. This is a new position, as there was no previous open interest in that strike.

Seconds later, a block of 330,000 shares of ERIC traded for $12.55. Combined with the long calls, this creates a delta-neutral play that is long volatility. The implied volatility of those calls is 29 percent, while the 20-day historical volatility is just below that. (See our Education section)

ERIC finished the day at $12.49. The Swedish telecommunications company was as high as $14.22 on Sept. 19 but below $12 just two weeks ago.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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