Options Trading News

October 8, 2013  Tue 4:14 AM CT

The action is turning cautious in Adtran with earnings coming out this afternoon.

optionMONSTER's Depth Charge monitoring system detected the purchase of about 2,000 October 27 puts for $1.05 to $1.25. Volume was more than 12 times open interest at the strike, indicating that a new position was initiated.

The investor has the right to sell shares in the networking-technology company for $27 over the next two weeks no matter how low they may drop in that time. They'll appreciate to the downside, generating potentially significant leverage in the event of a selloff. The buyer could be using the contracts to protect a long position in the stock or to speculate on a drop. (See our Education section)

ADTN rose 0.78 percent to $26.98 yesterday and is up 38 percent so far this year. Its last two quarterly reports beat expectations. The stock is back around a level where it bounced in 2011 and then gapped lower in 2012, which could make some chart watchers think that it's now resistance.

Total option volume was 34 times greater than average in the session, according to the Depth Charge.
Share this article with your friends



The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »