OptionsHouse

Options Trading News

August 29, 2012  Wed 11:17 AM CT

SBAC: SEE CHART GET CHAIN FIND STRATEGIES

Investors think there is no going back for SBA Communications.

optionMONSTER's monitoring systems detected the sale of 10,000 March 50 puts for $0.80. Volume was more than 15 times previous open interest at the strike.

The investor is now obligated to buy shares in the owner of wireless-communications towers for $50 if they close below that level on expiration. If they remain above it, he or she will keep the premium and the options will expire worthless.

Selling puts is a common strategy when traders like a company because it lets them get long on a pullback, but they also don't have to expend capital buying shares right away. See our Education Section for more ideas on how to make money from the passage of time.

SBAC rose 0.43 percent to $60.21 in early afternoon trading and is up more than 60 percent in the last year. The stock and its peers has been melting steadily higher as investors flock to low-risk companies with real assets.

It also had resistance around $50 in March and bounced at that level in May, which could help explain why puts were sold at that level.

Overall option volume in the name is 16 times greater than average so far today.

Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

View more education articles »