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September 18, 2012  Tue 9:17 AM CT

SPN: SEE CHART GET CHAIN FIND STRATEGIES
Superior Energy Services faces potential resistance at $25, and a large trader is targeting that level.

optionMONSTER's tracking programs detected volume of more than 7,000 contracts in the October 25 calls, all of which priced for $0.40. That was near or at the bid, indicating they were sold. Previous open interest in the strike was just 453 contracts, so new short positions were initiated.

The investor probably owns shares in the provider of oilfield services and is writing calls to earn income. He or she is now obligated to sell the stock for $25, which may be viewed as resistance because it's roughly the location of the 200-day moving average.

Selling would raise their effective exit price to $25.40 and provide cushion to the downside. (See the discussion of covered calls in our Education section)

SPN is down 0.89 percent to $23.50 in morning trading and has been trapped in its current range since the spring. Overall option volume is 19 times greater than average so far in the session.
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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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