What's behind call selling in Unilever
Chris McKhann | firstname.lastname@example.org
UN is up 0.6 percent to trade at $34.82. The consumer-goods company was down to $30.44 in early June, its 2012 low. The stock has jumped up to or near $35 four times over the last year but was unable to hold that level for more than a single day.
Today's option trading shows that a similar pattern may be setting up. A trader sold four blocks of 1,397 September 35 calls for $0.63 and $0.62 against previous open interest of 872 contracts, according to optionMONSTER's systems.
The calls may have been naked in a bet with an initial bearish bias, or they could have been traded against long shares as a covered call trade. The latter would be bullish up to the strike price but would give up any stock gains beyond that level. (See our Education section)