Options Trading News

December 11, 2012  Tue 2:14 AM CT

Chicago Bridge & Iron has been running higher in recent weeks, and a large trader apparently expects the energy-services construction company to make a sharp move up or down.

optionMONSTER's Heat Seeker system detected the purchase of 10,000 January 43 calls in a single print for $0.65. The volume was well above the open interest of 1,548 contracts, so is clearly fresh buying.

Roughly 2 minutes after the options traded, 300,000 CBI shares were sold for $40.9167. The delta of the long calls would make the overall position market-neutral, looking for greater volatility as opposed to a particular direction. (See our Education section)

CBI finished the day up 0.36 percent at $41.25, bumping up against resistance that goes back to early May. Shares bounced off support around $37 in mid-November.
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The art of trading

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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