Options Trading News

September 21, 2012  Fri 9:16 AM CT

Delphi Automotive hit an all-time high this morning before pulling back with a large call sale.

DLPH is now down 0.34 percent to $31.91. The auto-parts manufacturer peaked at $33.34 off the open but fell quickly from there.

A trader sold 10,000 February 35 calls for the bid price of $1.10 in volume that far outstripped the name's total daily average of just 1,600 contracts, according to optionMONSTER's systems. Open interest in this strike was 7,318 at the start of the session, so this is a new position.

The call selling is a bet that DLPH will be below $35 by that February expiration. The options may have been traded against long stock as a covered call position, which would be bullish up to the strike price but not beyond. (See our Education section)
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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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