Options Trading News

April 26, 2013  Fri 9:19 AM CT

A large trade is apparently looking for Supervalu to remain range-bound as the supermarket chain climbs back to levels of a year ago.

More than 34,000 SVU options have already changed hands this morning, compared to a daily average of 2,400, and almost all of the volume is in a single trade that is counting on lower volatility in the stock. optionMONSTER systems detected the sale of 15,000 each of the June 6 calls and puts for $0.32 and $0.40 respectively.

This creates a short-straddle position, which would take in a combined credit of $0.72. That would be kept as profit if SVU remains around $6 through expiration in mid-June. (See our Education section)

SVU is up 0.5 percent to $6 even. It has closed at this level the last few days, its highest since exactly a year ago. Shares were as low as $1.68 last July. 
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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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