Learn the trade here. Make it on tradeMONSTER

Options Trading News

November 28, 2012  Wed 11:41 AM CT

ADT: SEE CHART GET CHAIN FIND STRATEGIES
ADT is attracting a large call spread as the electronics-security company tries to push to new highs.

A trader bought 1,590 December 44 calls for $1.06 while selling 3,180 December 46 calls for $0.38, according to optionMONSTER's Heat Seeker tracking system. The volume at each strike was well above open interest at the beginning of the day, so this is a new ratio spread.

ADT is up 0.48 percent to $44.04 this afternoon. It opened at $42.38 after releasing earnings results yesterday and has been climbing since. Shares traded as high as $45 yesterday, a new high, but closed lower. The stock was down at a low of $35.38 in mid-October.

Today's call vertical spread cost the trader $0.30, which will be lost if ADT is below $44 at expiration. The maximum gain comes if the stock is right at $46, while the trader is essentially short shares above that price.
Share this article with your friends


Related Stories

ADT

How ADT trade is playing volatility

April 2, 2014

A complex trade is apparently combining stock and options to bet on higher volatility in the electronic-security company, which reports earnings report at the end of this month.

Premium Services

Education & Strategy

When cash is king (of hedging)

Whether your trades are winning or losing, it can be tempting to add to your positions. But in either case,...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER