OptionsHouse

Options Trading News

February 21, 2014  Fri 11:06 AM CT

ACAS: SEE CHART GET CHAIN FIND STRATEGIES
A large put trade in American Capital is part of a volatility strategy as shares continue to climb.

optionMONSTER Depth Charge system shows that a trader bought 10,000 August 12 puts for the ask price $0.22. There was no previous open interest at that strike, so this is a new position.

Less than 2 minutes later a block of 100,000 shares traded for $16.06. So the overall strategy is apparently a delta-neutral play that is looking for higher volatility than that implied by the option price. (See our Education section)

ACAS is up 2.53 percent to $16.19 in midday trading, its highest level since hitting a 52-week high of $16.28 a month ago. The private-equity firm dipped as low as $14 after releasing earnings results two weeks ago.

More than 21,000 ACAS options have traded so far today, 5 times its daily average for the last month.
Share this article with your friends


Related Stories

ACAS

Bulls riding trend in American Capital

January 13, 2016

The private-equity and venture-capital firm is up more than 9 percent in the last three months, and traders are looking for the upward momentum to continue.

OptionsHouse

Premium Services

Upcoming Webinar:

How to Defend Your Portfolio and Profit in a Market Selloff

http://bit.ly/1OSMWU6

Jon Najarian and Sandy Chaikin of Chaikin Analytics demonstrate how to play defense when the market is selling off. And, how to turn misery into money, whether investing in stocks or trading options.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »