Options Trading News

September 3, 2013  Tue 9:17 AM CT

A large trader apparently believes that SolarWinds will hold current levels.

optionMONSTER systems detected the sale of 8,320 September 35 puts in one print for the bid price of $0.40. The previous open interest at that strike was 1,116, so this is a new position.

The put selling is betting that SWI will hold up above $35 through that expiration. The trader is taking the risk of having to buy shares if they are below that level. (See our Education section)

SWI is up 2.41 percent to $37.33 this morning. The information-technology company gapped down from above $46 on July 26 after its last quarterly report. The stock hit a low of $35.32 at the end of that month but has been holding above support at $35 since.

Almost 10,000 SWI options have changed hands already today, compared to a daily average of just over 1,000 in the last month.
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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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