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

Free Webinars

Education & Strategy

How to navigate earnings season

We are embarking on one of the most frustrating times for new option traders: earnings season.Many new traders buy options,...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER