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January 24, 2013  Thu 9:19 AM CT

PAYX: SEE CHART GET CHAIN FIND STRATEGIES
A large put trade tops today's option activity in Paychex, but it's not bearish.

The option volume in PAYX already tops 12,000 contracts this morning, which is more than 10 times its daily average in the last month. Almost all of that volume is in a February put spread.

A trader bought the February 31 puts for the ask price of $0.15 and sold the February 32 puts for the bid price of $0.30. The total volume at each strike exceeded 5,000 contracts, more than 5 times the previous open interest and therefore new positioning.

This credit spread takes in $0.15, which will be the profit if PAYX is above $32 at expiration. (See our Education section)

Shares of the payroll-outsourcing service are down 0.34 percent to $32.17. The stock was below $31 into the end of 2012 but up at resistance at $34 just two weeks earlier.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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