OptionsHouse

Options Trading News

February 26, 2013  Tue 2:14 AM CT

HON: SEE CHART GET CHAIN FIND STRATEGIES
Honeywell has pulled back from all-time highs reached last week, but one trader doesn't see that decline leading to a huge selloff in the next few months.

optionMONSTER's tracking systems detected the sale of 1,782 April 55 puts in 11 seconds yesterday, led by a print of 1,500 that went for $0.13. The volume was about 12 times higher than the strike's open interest of just 150 contracts before the day's trading began, clearly showing that this is a new position.

This put seller is looking for HON to stay above $55 through expiration in mid-April. If the stock falls below that strike price, the trader will face the obligation to buy the stock at that level. (See our Education section)

HON, which will hold its annual investor conference on March 6, fell 1.34 percent to $68.95 yesterday. The industrial and aerospace conglomerate hit a lifetime high of $71.43 last Wednesday before dropping with the rest of the market.

Total option volume in HON was 8,220 contracts yesterday, 60 percent higher than its daily average of 5,131 for the last month.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

How to Defend Your Portfolio and Profit in a Market Selloff

http://bit.ly/1OSMWU6

Jon Najarian and Sandy Chaikin of Chaikin Analytics demonstrate how to play defense when the market is selling off. And, how to turn misery into money, whether investing in stocks or trading options.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »