Options Trading News

November 8, 2012  Thu 3:16 AM CT

One investor is targeting a key level on Gentex's chart, looking for the auto-parts company to remain weak for at least the next month.

optionMONSTER's tracking programs detected the sale of about 4,000 December 20 calls for $0.25 and $0.30. Volume was almost triple previous open interest at the strike.

The investor is now obligated to sell shares in the company for $20 if they close above that level on expiration. He or she may already own the stock or simply be using the calls to earn income on the name. (See our Education section)

GNTX fell 3.06 percent to $17.43 yesterday and has lost more than 40 percent of its value this year. It bounced around $20 in June, then gapped lower the following month on a weak quarterly report. That could make some chart watchers expect resistance around $20 and help explain the call selling at that level.

The trade pushed total option volume to about 8 times greater than average in the session.
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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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