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January 9, 2013  Wed 9:52 AM CT

HPQ: SEE CHART GET CHAIN FIND STRATEGIES
A large trade in Hewlett-Packard is looking for more volatility ahead.

A trader bought 10,000 August 13 puts for the ask price of $0.78, according to optionMONSTER's Depth Charge system. The previous open interest in the strike was just 715 contracts, so this is clearly a new position.

The put buying appears to be tied to a position in HPQ stock, which saw a single block of 230,000 shares trade for $15.723 a minute after the option activity. The delta of the puts was -0.23, which would make the overall position delta-neutral and therefore focused on higher volatility, not direction of the stock. (See our Education section)

HPQ is up 1.38 percent today, trading at $15.60. The computer company has been on the rise for the last six weeks since its last earnings announcement, when shares traded to a low of $11.35, but the stock would still need to double to get back to the February highs.
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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