OptionsHouse

Options Trading News

April 17, 2013  Wed 4:14 AM CT

SWI: SEE CHART GET CHAIN FIND STRATEGIES
SolarWinds has been lagging, and one investor is bracing for continued weakness.

optionMONSTER's Depth Charge tracking program detected the sale of 1,300 June 45 puts for $1.30 and the purchase of an equal number of September 45 puts for $2.80. Volume was below open interest in the June contracts, indicating that an existing position was closed and rolled forward in time.

The transaction cost $1.50 and will provide an additional three months of downside exposure to the software company. In addition, adjusting the trade now protected the investor from the quickening pace of time decay in the shorter-term options as expiration approaches on June 21. (See our Education section)

SWI rose 1.05 percent to $51.12 yesterday. While the stock roughly tripled between September 2011 and September 2012, it's lagged the broader market since and is down 2 percent so far this year as earnings beat expectations by narrower margins. The next quarterly report is scheduled for after the closing bell on April 30.

Total option volume was 7 times greater than average in the session, according to the Depth Charge. Puts accounted for almost four-fifths of the activity.

Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »