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August 30, 2013  Fri 2:11 AM CT

ZNGA: SEE CHART GET CHAIN FIND STRATEGIES
One big investor thinks Zynga is down but not out.

Yesterday's big trade occurred in long-term put contracts, with 20,000 of the January 2.50 contracts bought for the ask price of $0.20 against open interest of 34,271. At the same time they sold 29,137 of the January 2015 2s for their bid price of $0.25. It was done against open interest of 1,450 so a new position was initiated.

It may have been a new opening diagonal spread. That would mean the trader is looking for ZNGA to fall below $2.50, but not below $2. It is more likely the roll of the short position, with the trader buying back the nearer puts and selling the further. That also is looking for shares to remain above $2. (See our Education Section.)

ZNGA rose 1 percent to $2.91, in the middle of its 52-week range. Shares approached $2 in November and climbed from there to just above $4 in mid-March. Since then they have settled between the two prices.
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Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

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