OptionsHouse

Options Trading News

February 14, 2013  Thu 9:56 AM CT

YHOO: SEE CHART GET CHAIN FIND STRATEGIES
A bearish combination trade tops the option action in Yahoo today with shares near five-year highs, though it coud be hedging a long position.

optionMONSTER systems show that a trader sold 5,000 July 24 calls for the bid price of $0.54 and bought 5,000 July 19 puts for the ask price of $0.63. The volume in the latter strike was below the previous open interest, but this appears to be a new position.

The trader spends $0.09 for the combination, which is at risk if YHOO remains between $19 and $24. On its face, the risk appears to be shares running above $24, at which point the trader would have to sell shares. But the trade could be tied to long shares as a protective collar strategy.

YHOO trades at $21.17, up fractionally on the day. The Internet giant is just off of Friday's close, which was the highest since July 2008.
Share this article with your friends


Related Stories

YHOO

Investors bet Yahoo is on solid ground

June 15, 2016

A large trade shows support for the Internet company, which reported bullish results on April 19 and is up 9 percent in the last three months.

OptionsHouse

Premium Services

Education & Strategy

The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

View more education articles »