Options Trading News

October 18, 2012  Thu 10:53 AM CT

As Comcast trades at another all-time high today, one strategy is looking for the cable stock to move sharply higher or lower.

A trader bought 9,980 April 34 puts for the ask price of $1.14, according to optionMONSTER's Depth Charge system. Open interest in the strike was just 146 contracts at the start of the session, so the puts are seeing fresh buying.

Less than two minutes after they were purchased, however, the largest block of CMCSA stock traded as 289,420 shares were bought for $37.5328. That would balance the delta of the puts and create an overall position that is a long volatility play, looking for CMCSA to spike in either direction and/or for the actual volatility to be greater than that implied by the options.

CMCSA is up 1 percent to $37.50. Shares bounced off support at $35 last week and have been trending steadily higher from their 52-week of $20.90 set at the end of November.
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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.

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