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Options Trading News

January 24, 2013  Thu 2:45 AM CT

CBOE: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is betting that CBOE Holdings will reach new all-time highs.

A trader sold 4,000 March 32.25 calls for $1.35 and bought the same number of June 34.25 calls for $1, according to optionMONSTER's Heat Seeker systems. The March contracts were below the previous open interest while the June options were above it.

This indicates that the investor closed the March 32.25 calls, which are now in the money, and rolled the position to the higher strike in June. The trader probably made a profit on the initial calls and is using those gains to buy another three months of upside exposure.

CBOE slipped 0.27 percent to close yesterday at $33.15 but is just off the previous session's 52-week high of $33.33. That in turn is not far from its lifetime intraday high of $34.18, reached in June 2010 just days after the options-exchange operator went public.

The calls bought yesterday, which lock in the price where shares can be bought, are looking for CBOE to be above $34.25 by mid-June. The options will expire worthless if the stock is below that strike price by then. (See our Education section)

The trade pushed total option volume in the name past 9,300 contracts, more than 6 times its daily average in the last month. Only 114 puts traded in the entire session.
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