Options Trading News

May 29, 2013  Wed 4:45 AM CT

One investor sees more upside in Avon Products after a huge rally in the cosmetics stock.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 January 25 calls for $1.80 and the sale of 2,500 January 30 calls for $0.43. Another 2,500 of the January 20 calls were sold at the same time for $4.87, but volume was below open interest in those.

It appears that an investor came into the session with a winning trade in the 20s, which was then closed and rolled to a vertical spread in the 25s and 30s. The trader collected a credit of $3.50 and stand to earn an additional $5 if the stock closes at or above $30 on expiration. (See our Education section)

AVP rose 0.38 percent to $23.68 yesterday and is up more than 70 percent since touching a long-term low at $13.70 in November. The company has been reshuffling management and cutting costs in attempt to turn around its business following a slump in emerging markets and a leadership crisis in recent years.

It had peaked around $30 in early 2011 before its major selloff, and yesteday's trader is now targeting that level.

Total option volume was almost 8 times greater than average in the session, according to the Heat Seeker. Calls outnumbered puts by more than 118 to 1.
Share this article with your friends

Related Stories


Notable option activity in equities

October 2, 2015

Nearing the halfway mark in today's session, here are the individual equity names with unusual option activity on optionMONSTER's ActionTracker data system.


How the bears are playing Avon

September 11, 2015

The ailing cosmetics firm has lost more than half its value this year amid broad sales declines and weakness in Latin American currencies.

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

Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »