OptionsHouse

Options Trading News

May 29, 2013  Wed 4:45 AM CT

AVP: SEE CHART GET CHAIN FIND STRATEGIES
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

AVP

How Avon investor is looking for rally

June 6, 2016

The cosmetics icon is down 7 percent in the last month, but one investor is betting that it will rally by the end of next week.

OptionsHouse

Premium Services

Education & Strategy

Know the risks behind covered calls

Selling calls is a popular strategy for both retail and institutional traders, but they typically do it in very different fashions.

View more education articles »