Options Trading News

October 9, 2013  Wed 3:47 AM CT

A large trader apparently believes that Paychex will hold current levels.

A trader sold 5,000 November 39 puts in one print for $0.65. This is clearly a new position, as previous open interest in the strike was just 311 contracts.

The put seller is betting that PAYX will stay above $39 through expiration in mid-November. The trader is taking on the risk of having to buy shares if they are below that strike price strike. (See our Education section)

PAYX was off just 0.25 percent yesterday to close at $39.56, much less than the broader market's losses on a percentage basis. The payroll-outsourcing company climbed to a five-year high of $41.24 two weeks ago but is now in the middle of its recent range.

About 9,300 total options changed hands in PAYX yesterday, more than triple its daily average for the last month.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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