OptionsHouse

Options Trading News

January 3, 2013  Thu 9:05 AM CT

AIG: SEE CHART GET CHAIN FIND STRATEGIES
A short-term put spread tops the action in American International Group even as it trades near two-month highs.

A trader bought 2,550 January 36 puts for $0.38 and sold 5,100 January 35 puts for $0.14, according to optionMONSTER systems. This spread is in the new Weekly options for next week, so there was no open interest in either strike.

This put vertical cost $0.10 to open, which is the maximum at risk if AIG remains above $37. The maximum gain on this ratio spread would come if the stock is right at $36, while below that the trader is effectively long stock. (See our Education section)

AIG is up fractionally this morning at $36.53. Yesterday's close was the insurance giant's highest since Oct. 18, as shares have run up from support at $31 over the last six weeks.
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

Premium Services

Education & Strategy

Options Academy: Inside the Reversal/Conversion

In a prior article, I informed you that there was a way of entering and exiting a trade in a certain way which will allow you, on the right occasion, to lock in extra profit via a volatility arbitrage. If this happens, you will find yourself closed out into a reversal or a conversion...

View more education articles »