Trader bets on cap in Seagate shares
Chris McKhann | firstname.lastname@example.org
A trader sold 6,400 January 34 calls for the bid price of $1.20, according to optionMONSTER's tracking systems. That volume was nearly 10 times the open interest of 654 contracts in the strike at the start of the session, clearly indicating a new position.
The call selling is based on the idea that STX won't see much upside beyond $34. The options may have been sold naked with an initial bearish bias, or they could have been traded against long stock in a covered call position. The latter would be bullish up to the strike price but not above it. (See our Education section)
STX is up 0.47 percent at $30.19 this afternoon and has held support at this level for the last month. The computer hard-drive maker hit a 52-week high of $35.71 in mid-August.