Options Trading News

January 9, 2014  Thu 9:18 AM CT

A complex trade is looking for further gains in Tiffany in the short term.

A call spread with just one day until expiration dominates today's option volume in the iconic jeweler.  A trader bought 3,000 Weekly 94 calls for $1.06 and sold 6,000 Weekly 96 calls for their bid price of $0.43. Volume was above previous open interest in each strike, indicating that this is new activity.

The trader is spending $0.20 to open this ratio spread, which is the amount at risk if TIF remains below $94 through the end of tomorrow's session. The maximum gain would come with shares at $96, but above that the trader is effectively short 300,000 shares of the stock. (See our Education section)

TIF is trading at $91.93, up 0.25 percent on the day. That is not far of the stock's closing high of $92.78 set on the last day of 2013.
Share this article with your friends


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 »