OptionsHouse

Options Trading News

December 14, 2012  Fri 2:45 AM CT

RIMM: SEE CHART GET CHAIN FIND STRATEGIES
A short-term put strategy targeted Research In Motion yesterday as shares climbed to a seven-month high.

optionMONSTER systems show that a trader sold 6,981 December 12 puts that expire next week for the bid price of $0.223 in volume that was less than open interest of more than 17,000 contracts. At the same time he or she bought the same number of newly released December 13.50 puts for the ask price of $0.76 against no open interest.

The trade could be a put vertical spread, looking for RIMM to fall below $12 in the next week. Or this could be a roll, with the trader moving the position to the higher strike as the stock was rising. (See our Education section)

RIMM finished yesterday at $13.86, up 4.1 percent on the day. The BlackBerry maker has more than doubled from its 52-week low of $6.22 set in late September. Shares are now back to where they were at the start of May.  

More than 312,000 RIMM options changed hands yesterday, about 3 times its daily average.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »