Options Trading News

February 6, 2013  Wed 3:16 AM CT

U.S. Bancorp has been drifting sideways in 2013, and one trader apparently believes that the stock will hold above a key support level.

optionMONSTER's tracking systems detected the sale of 4,504 March 29 puts for $0.05 in 10 seconds yesterday. The volume was nearly 10 times higher than the strike's open interest of 467 contracts before the session began, clearly indicating that this is a new position.

USB rose 0.52 percent yesterday to close at $33.13. The financial-services company gapped higher with the broad market rally at the beginning of the year but has been trapped in a tight range since then, now trading right at its 100-day moving average.

Yesterday's put seller is betting that the stock will hold above $29 through expiration in mid-March. If USB falls below that strike price, which has held as support for the last year, the trader will face the obligation to buy the shares. (See our Education section)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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