Options Trading News

February 26, 2013  Tue 2:45 AM CT

Hewlett-Packard held most of last week's big gains even through the market downturn yesterday, but a large trade is expecting the stock to stay range-bound in coming months.

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.
Share this article with your friends

Related Stories


Bulls returning to Hewlett-Packard

September 15, 2015

The computing company bounced sharply after falling with last month's market selloff, but shares have drifted lower in the last week.


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 »