OptionsHouse

Options Trading News

June 12, 2013  Wed 11:10 AM CT

MJN: SEE CHART GET CHAIN FIND STRATEGIES
A bearish trade dominates today's option activity in Mead Johnson Nutrition.

optionMONSTER systems show that a trader bought 3,800 July 70 puts for $0.30 and sold the same number of July 90 calls for $0.35. The volume was multiples of open interest at each strike, clearly indicating that this is new activity.

This bearish combination trade takes in a small credit, which will be the profit at expiration if shares are between the two strikes at that time. But this is quite likely a collar trade to protect long shares. (See our Education section)

MJN is up 0.32 percent to $81.90 in early afternoon trading. The infant-formula company was above $85 at the end of May and at support around the $70 level in mid-March.

More than 8,100 MHN options have changed hands, already almost 10 times its daily average in the last month.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »