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September 14, 2012  Fri 9:52 AM CT

STX: SEE CHART GET CHAIN FIND STRATEGIES
Seagate Technology is seeing an interesting call spread as the stock trades in the middle of its recent range.

STX is down 1.11 percent to $29.98 after trading as high as $31.50 this morning. Shares have come off an all-time high of $35.71 set last month and are now back to where they were at the start of August. The computer hard-drive maker was at a 52-week low of $9.05 last October.

optionMONSTER's systems show that the trade involved 5,000 September 31 calls for $0.22 and 5,000 September 30.50 calls for $0.51. The latter volume was a bit less than open interest, so it could have been a closing transaction.

This could be a simple roll higher, with the trader closing the in-the-money calls and rolling the position up to another strike that is just out of the money. It could also be a new call spread. (See our Education section)

The interesting thing here is the cost and the use of the new $0.50 strikes. The spread would have cost $0.29, but the stock at the time of the trade was $30.82.

So the spread was below parity as the $30.50 strike was $0.32 in the money. In other words, if the spread was purchased, the trader could make money, though clearly a very small amount, even if the stock doesn't move higher.
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