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

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »