Options Trading News

October 24, 2013  Thu 11:17 AM CT

An extremely short-term bet is looking for Home Depot to hold current levels through the end of this week.

optionMONSTER systems show that a trader sold a block of 3,000 Weekly 76 puts that expire tomorrow afternoon for $0.19, below the listed bid price at the time. The volume was more than 10 times the previous open interest, so this was a new opening position.

If today's gains hold up by tomorrow's close, the put seller would get to keep that $0.19 credit as profit. He or she also takes on the risk of having to buy shares if they are below the $76 strike price, but that actually may be part of the plan because some traders use at-the-money short puts to acquire long positions at a discount. (See our Education section)

HD is up 2.09 percent to $76.65 this morning. They were down near $74 at Monday's low.
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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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