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November 7, 2012  Wed 2:14 AM CT

WIN: SEE CHART GET CHAIN FIND STRATEGIES
Windstream has been falling for more than a month, and a large option trade is setting up for another leg down.

WIN fell 0.63 percent to $9.44 yesterday, its lowest close since August. Shares of the broadband technology company traded near resistance at $11 into late September before gapping lower.

More than 18,000 WIN options traded, compared with a daily average of 1,300. Most of the volume was in a large ratio spread, in which a trader bought 5,000 January 9 puts of $0.37 and sold 10,000 January 7.50 puts for $0.09.

This put spread costs the trader $0.19, which will be lost if WIN remains above $9 through expiration. The maximum profit would come if the stock is right around $7.50 at expiration. Below that, the trader is effectively long shares through the additional short puts. (See our Education section)
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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