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Options Trading News

May 29, 2012  Tue 2:21 AM CT

CMCSK: SEE CHART GET CHAIN FIND STRATEGIES
One investor is using puts to manage an entry into Comcast.

optionMONSTER's monitoring systems detected the sale of about 3,000 June 29 puts in the company's non-voting A shares for $0.65 to $0.75. Volume was more than 28 times open interest in the strike.

CMCSK fell 0.03 percent to $28.63 on Friday, making those contracts in the money. The investor will be forced to buy the stock for $29 if it remains below $29 for the next three weeks. But including the credit earned, the entry price would be about $28.30. If it closes above $29, the puts will expire worthless and the trader will keep the income already earned.

Selling puts enables the investor to establish a long position in the shares at a modest discount to their market value, sparing them the difficulty of waiting for a lower price. (See our Education section)

The trade pushed total option volume to 5 times greater than average in Friday's session.
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