OptionsHouse

Options Trading News

September 25, 2012  Tue 11:24 AM CT

MTL: SEE CHART GET CHAIN FIND STRATEGIES
Mechel is pulling back again today, but one trader apparently believes that the Russian mining and steel company will hold current levels.

A trader sold 5,000 November 7 puts for the bid price of $0.50, according to optionMONSTER's tracking systems. Open interest in the strike was just 120 at the beginning of the day, so this is clearly a new position.

MTL is off 0.48 percent to $7.24. It was above $8 last week, the highest level since the start of May. Shares hit a 52-week low of $5.08 a month later and have been slowly trending higher since then.

The put selling is a bet that MTL will hold up above $7 through that expiration. Given how close the strike is to the stock price, the trader is also willing to buy shares if they are assigned but would have an effective buying price of $6.50 including the credit for the puts. (See our Education section)
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

The Problem with Trading Earnings

AP Options specializes in Swing Trading. Swing trading is the art of locating short term, quick, aggressive movements in a stock normally created by the technicals but, can be sometimes created by the fundamentals. These trades, at least in this service, last a couple of days to a week in the majority of cases.

View more education articles »