Options Trading News

August 29, 2013  Thu 2:45 AM CT

One investor wants to turn time into money with Sony.

optionMONSTER's tracking systems detected the sale of about 3,400 April 21 calls for $1.95 and the purchase of a similar number of October 19 calls for $1.75. Volume was below open interest in the 19s, which suggests that an existing short position was closed and rolled to the 21s.

The trader probably owns shares in the Japanese electronics company and had sold the options as part of a covered-call strategy. Adjusting the trade yesterday lets the investor collect an additional $0.20 of income while also raising by $2 the price at which the stock must be sold. (See our Education section for more on how to make money even when your picks don't go higher.)

SNE fell 1.08 percent to $20.16. The name lit up our scanners as a buy in December, proceeded to more than double by May, and has been consolidating since. Based on yesterday's option action, investors apparently think that it will slowly grind higher and are willing to hold it over the long term.

The company has also attracted interest from activist investor Dan Loeb, who wants it to spin off its movie studio, and benefited from a weak yen earlier this year.

Some 9,400 Sony options changed hands yesterday, compared with fewer than 2,500 in a typical 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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