Options Trading News

May 10, 2013  Fri 3:47 AM CT

Trina Solar has declined sharply in the last week, but traders apparently believe that any further losses will be limited.

optionMONSTER systems show that 12,000 June 4 puts traded in a strong selling pattern yesterday, led by a print of 8,000 that went for $0.23. The volume was far above the strike's open interest of 2,312 contracts before the session began, clearly indicating new activity.

The put selling is a bet that TSL will hold above $4 through expiration in mid-June. If the stock falls below that strike price, the trader faces the possibility of having to buy shares at that level. (See our Education section)

TSL rose 1.48 percent, or $0.07, to $4.79 yesterday. The solar-products manufacturer was below $4 last month but traded at $5.30 a week ago, its highest close since February.

More than 15,000 TSL options changed hands overall in the session, 10 times its daily average for the last month.
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The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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