Options Trading News

March 11, 2014  Tue 9:06 AM CT

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

More than 5,300 April 112 puts have been sold today, with the biggest block of 4,388 going for $1.23. This is clearly a new position, as open interest in the strike was a mere 23 contracts before the trade appeared.

The put seller is looking for COST to hold above $112 through expiration in mid-April. The trader carries the risk of having to buy shares if they are below that strike price. (See our Education section)

COST is down 0.38 percent to $114.15 this morning. The discount club has been holding above $112 since gapping up through that level at the start of February, despite slipping on earnings results last week.

Total option volume in COST tops 6,200 so far today, already above its full-session 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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