OptionsHouse

Options Trading News

February 6, 2013  Wed 2:45 AM CT

PBI: SEE CHART GET CHAIN FIND STRATEGIES
Pitney Bowes has been struggling to recover in the last year but is facing a new put position.

optionMONSTER's Depth Charge system shows that a trader sold 31,330 of the April 8 puts for the bid price of $0.05 yesterday in volume that was below the previous open interest of 41,793 contracts. At the same time, he or she bought 15,665 July 8 puts for the ask price of $0.25 in volume well above that strike's open interest of 1,478 and therefore a new position.

This could be a new diagonal spread, which would be looking for PBI to hold above $8 through April and then fall from there. But it seems more like that the trader is rolling an April long-put position forward by two months while cutting the number of contracts in half, profiting if the stock falls below $8 by mid-June. (See our Education section)

PBI rose 0.9 percent yesterday to $13.46. The mail-processing equipment maker was up at $14.49 last week after reporting earnings results but has been giving up some of that gain since then. It was down at a 52-week low of $10.34 at the end of 2012.  

More than 56,000 PBI options traded yesterday, compared to a daily average of 5,421 in the last month. Fewer than 1,600 of those contracts were calls.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »