Learn the trade here. Make it on tradeMONSTER

Options Trading News

November 8, 2012  Thu 2:45 AM CT

GGB: SEE CHART GET CHAIN FIND STRATEGIES
Brazilian steel company Gerdau fell with the rest of the market yesterday, but one trader apparently believes that further losses will be limited.

A trader sold 3,000 March 7 puts for the bid price of $0.15, according to optionMONSTER's systems. There was no previous open interest at that strike, so this is a new position.

GGB lost 2.3 percent to close at $8.94 yesterday. It bounced at $8.51 on Nov. 1 after reporting third-quarter earnings but remains below its 52-week high of $10.82 reached in mid-September.

The put selling is a bet that GGB will hold above $7 in the coming months. While the position does have an initial bearish bias (positive delta), it can profit with the stock anywhere above $6.85 at that time. (See our Education section)
Share this article with your friends


Premium Services

Education & Strategy

When cash is king (of hedging)

Whether your trades are winning or losing, it can be tempting to add to your positions. But in either case,...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER