What's behind combo trade in Yahoo
Chris McKhann | [email protected]
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.