Options Trading News

July 25, 2013  Thu 3:16 AM CT

A large trade is looking for a floor in shares of United Parcel Service.

optionMONSTER systems detected the sale of 10,000 September 85 puts for the bid price of $1.34. This is clearly a new position, as the strike's open interest was just 456 contracts before the trade appeared.

The put seller will keep the $1.34 credit as profit if UPS holds above $85 through expiration in mid-September. But the trader is taking on the risk of having to buy shares if they are below that strike price. (See our Education section)

UPS finished yesterday at $86.98, down 0.61 percent. The shipping giant has been trending higher since falling below $70 in November, hitting a peak of $91.78 two weeks ago.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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