Shares of Capital One retreated from a stubborn resistance level yesterday, but a long-term trade sees a limit to potential downside.
COF closed at $57.04, down 0.64 percent. The financial company almost touched $58 early in the session, a huge resistance level that the stock hit four times in the last six weeks. It hasn't closed above that level since 2007.
More than 7,000 COF options traded yesterday, twice its daily average. Topping the action were 5,000 January 2014 47 puts that were sold for the bid price of $4.65 against open interest of just 462 contracts.
The put selling is a bet that COF will hold above $47 through that long-term expiration. The trader is also showing that they believe that COF won't be much more than $4.65 above the current price at that time. (See our Education section)
Options Trading News
Social Media
Follow optionMONSTER for news and updates
Premium Services
-
Semi-active traders looking for simple calls and spreads (5 per week).
Learn More -
Entry-to-mid level traders looking for full circle trade analysis (1 per week).
Learn More -
Tailored, one-on-one education designed and led by Jon & Pete (3 months and up)
Learn More
Education & Strategy
So why do we bother with spreads?
Trading options allows for far deeper levels of complexity than stocks. And while you may never fully venture all the...
