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May 9, 2013  Thu 10:49 AM CT

OIS: SEE CHART GET CHAIN FIND STRATEGIES
Oil States International hit an all-time high today, and one trader is betting that the energy-services company will hold its gains in the near term.

OIS is up 3.65 percent to $98.95 in midday trading, not far off the intraday high of $99.50 set this morning. The stock has run up from around $75 at the start of last week, fueled by news that activist hedge fund Jana Partners has a 9.2 percent stake in the company.

optionMONSTER systems show a trader sold 3,000 May 95 puts for the bid price of $0.85 on a wide bid/ask spread. This is clearly a new position, as the strike's open interest was just 4 contracts before the trade appeared.

The put selling is a bet that OIS will hold the recent gains through expiration a week from tomorrow. If the stock falls below the $95 strike price--where it was only yesterday--the trader would face the obligation to buy shares at that level. (See our Education section)
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Options Academy: At the Break

So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

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