Why trader is selling calls in Melco
Chris McKhann | email@example.com
optionMONSTER systems show that a trader sold 3,800 January 33 calls for $0.55. The previous open interest had been just 173 contracts, so this is a new position.
These calls could have been sold naked with an initial bearish bias, especially given how far out of the money and time it is. Alternatively they could also have been sold against long shares in a covered-call position, which would be bullish but only up to $33. (See our Education section)
MPEL is up fractionally this morning to $26.37. The casino operator has been trending higher from below $22 in the last month. It has been trading in a very tight range in the last week or so and posted a closing high of $26.40.