Options Trading News

September 20, 2016  Tue 6:14 AM CT


A large trade is betting that upside potential is limited in Baxter.

optionMONSTER's monitoring systems detected the sale of 7,470 October 49.50 calls in one print for $0.20 yesterday. There was no open interest in the strike before the trade appeared, showing that this is a new position.

Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)

BAX fell 0.06 percent to $47.25 yesterday but is up 6 percent in the last three months. The kidney-treatment developer is expected to report earnings in pre-market hours on Oct. 27.

Overall option volume was 6 times greater than average in the name yesterday.

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