Learn the trade here. Make it on tradeMONSTER

Options Trading News

January 27, 2014  Mon 11:06 AM CT

MRK: SEE CHART GET CHAIN FIND STRATEGIES
Merck is fighting today's market downtrend, but call selling sees limited upside in the pharmaceutical giant.

optionMONSTER systems show that a trader sold 11,500 March 55 calls for the bid price of $0.90. This is clearly a new position, as open interest in the strike was just 1,404 contracts before the trade appeared.

Almost exactly a minute later, a print 414,000 MRK shares was bought for $53.5278. Combined with the short calls, this creates a delta-neutral play that is betting on lower volatility than that implied by the options' premiums in coming weeks. (See our Education section)

MRK is up 2.43 percent to $53.24 in midday trading after hitting a new 52-week intraday high of $54.10 this morning. The drug developer was below $48 a month ago. 
Share this article with your friends


Premium Services

Archived Webinar

Options on Futures are Still Options

Education & Strategy

Before you quit that day job...

I try to avoid popular-culture references, but this week's "American Ninja Warrior" struck a chord. One contestant had laid it...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER