Options Trading News

November 1, 2013  Fri 11:12 AM CT

A large trader is looking for Home Depot to stay range-bound for the next two weeks.

More than 17,000 HD options have traded, topping its daily average for the last month. Most of that action is in the November 76 puts, where a block of 11,000 traded for $0.30.

At essentially the same time, a block of 220,000 HD shares was sold for $77.03. Taken together, the stock and option trades create a delta-neutral position that is short volatility. The trader is therefore looking for HD to remain range-bound and/or for the actual volatility to be less than that implied by those puts through expiration in mid-November. (See our Education section)

HD is down 0.87 percent to $77.21. The home-improvement giant has faced resistance at $78 going back to mid-August. There has been support at $74 since Sept. 10.

The company is scheduled to hold its annual conference for investors and analysts on Dec. 11.
Share this article with your friends

Related Stories


Can anything stop Home Depot?

November 24, 2015

The home-improvement retail has rallied about 10 percent since a better-than-expected earnings report, with management raising guidance for the second straight quarter.


Put sale sees floor in Home Depot

October 29, 2015

At least one trader is betting that the home-improvement retailer will hold its ground through quarterly results next month.


Premium Services

Education & Strategy

The art of trading

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.

View more education articles »