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May 24, 2013  Fri 3:47 AM CT

SYMC: SEE CHART GET CHAIN FIND STRATEGIES
Symantec has had a great run, but now one trader apparently thinks that it's going lower.

optionMONSTER's Depth Charge monitoring program detected the purchase of 10,000 June 22 puts for $0.25 and the sale of an equal number of June 21 puts for $0.10. Volume was more than triple the open interest at each strike, indicating that new positions were initiated.

The trade cost $0.15 and will earn a maximum profit of 567 percent if the Internet-security stock closes at or below $21 on expiration. This could be a speculative downside bet or a hedge on a long position. (See our Education section for more on the strategy, which is known as a bearish put spread because it leverages a move between two prices.)

SYMC fell 2.37 percent to $23.06 yesterday. It rallied more than 80 percent between last July and March, only to stall at a key resistance level dating to late 2004. Guidance was also weak after the last earnings report on May 7 as the falling Japanese yen hurt overseas revenue.

Total option volume was 8 times greater than average in the session, with puts outnumbering calls by a similar proportion.
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Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

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