tradeMONSTER: Trade free for 90 days

Options Trading News

September 6, 2013  Fri 11:43 AM CT

WLP: SEE CHART GET CHAIN FIND STRATEGIES
One investor apparently sees limited upside in health-benefits company WellPoint.

More than 12,000 WLP options have traded, triple its daily average for the last month. Almost all of that has been in the November 90 calls, which saw a block of 8,367 sold for the bid price of $2.40, according to optionMONSTER systems. The volume dwarfed the strike's previous open interest of 284 contracts, clearly showing that this is new positioning.

The call seller is betting that WLP will not see much upside beyond $90 through expiration in mid-November. These options were likely sold against long shares in a covered-call strategy, which is bullish up to that level but not beyond. Traders typically use covered calls to increase yield while holding onto shares. (See our Education section)

WLP is up fractionally to $87.52 this afternoon. The shares have been in a relatively tight range for the last two months between $84 and $88.
Share this article with your friends


Invest Like a Monster - Las Vegas: March 13-14

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER