OptionsHouse

Options Trading News

October 11, 2012  Thu 10:03 AM CT

NLY: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is expecting Annaly Capital to make a big move in either direction.

NLY is up 0.37 percent this morning at $16.23. The real-estate investment trust hit a 52-week of $17.75 on Sept. 12 and was just off that again at the end of the month. Shares have slid lower since then and yesterday hit their lowest levels since April.

Topping the option activity in the name today is one print in the January 2014 13 puts. A trader bought 2,500 of those contracts for the ask price of $0.94 on a wide bid/ask spread. The volume was more than the previous open interest, so it is a new position.

Shortly after the puts were purchased, a block of 80,000 NLY shares was bought for $16.25. This combination of stock and options creates a delta-neutral position that is looking for a sharp move in either direction and/or volatility that is greater than that implied by the options.

The implied volatility of those puts is 20 percent, while the 30-day historical volatility is 19 percent, a six-month high. (See our Education section)
Share this article with your friends


Related Stories

NLY

Notable option activity in equities

June 24, 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.

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

Premium Services

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »