Range play targets Hewlett-Packard
Chris McKhann | [email protected]
optionMONSTER systems show that 8,000 each of the April 17 puts and 21 calls traded for $0.28 and $0.30 respectively in what appears to be a short-strangle strategy. (See our Education section)
The position would take in a credit of $0.58, which would be the maximum profit if HPQ remains between $17 and $21 through expiration in mid-April. The risk is that the trader may have to buy shares at $17 and selling them at $21.
HPQ was down 0.68 percent yesterday to close at $19.07. The computer maker traded near $20 on Friday after gapping higher on its earnings report, posting its highest close since gapping down in August. Shares were trading below $12 in late November.
More than 96,000 HPQ options changed hands yesterday, more than triple its daily average in the last month.