Traders selling the now deep in-the-money calls could be cashing in on their well-placed bullish positions.
FORBES: Bulls And Bears Battle In Kohl's Options After Earnings
Just to reiterate, the analysis assumes you can purchase a two-week option that is 5% in-the-money.
The most popular put is the in-the-money December 16 strike, with open interest of 45, 303 contracts.
There is also the possibility that the trader was opening an in-the-money bear call spread.
Cramer, incidentally, would buy deep-in-the-money calls on Salesforce.com ahead of a West Coast conference on cloud computing.
FORBES: Cramer, Soros And The Dumbing Down Of Financial Journalism
By comparison, peak October call open interest totals a mere 4, 358 contracts at the in-the-money October 190 strike.
On the put side, peak font-month open interest rests at the in-the-money December 13 strike, totaling 3, 797 contracts.
FORBES: OmniVision Calls Popular Ahead of Earnings; How You Can Join the Trend
This preference for out-of-the-money puts versus in-the-money calls points toward bearish sentiment (i.e. low expectations) from the options crowd.
In-the-money calls are popular with buyers positioning for shares to appreciate, while out-of-the-money calls suggest more of a mixed picture.
He does not lose money on his investments, and in fact his BAC warrants went from out-of-the-money to in-the-money this morning.
FORBES: Buffett's Elephant Gun Shoots Bank of America Stock Skyward
Finally, the sale of two sizable chunks of in-the-money April contract call options generated big gains for another EEM-bull this morning.
FORBES: Clamor For Call Options As Goldcorp Shares Hit Two-Year High
It looks like traders exchanged roughly 6, 000 in-the-money puts at that strike against previously existing open interest of just 842 contracts.
FORBES: Bears Devour Cheesecake Factory Put Options, Bull Bets On Tech Comeback
Traders looking to take advantage of an unwinding of negative investor sentiment on ANR should consider the stock's in-the-money June 40 call.
Following at a close second is the in-the-money October 370 call, which has seen 4, 717 contracts traded on open interest of 13, 689 contracts.
Traders positioning to profit from further weakness in the price of the underlying snapped up more than 1, 250 in-the-money puts at the Jun.
Andy wanted some assurance he would get to keep his profits, just like his bosses were doing with their regular sales of in-the-money options.
If the stock price climbs, that option liability grows larger as all of the outstanding stock options move more in-the-money and become more valuable.
FORBES: Shorting The NYSE A Good Hedge Against Market Selloff
Peak October call open interest resides at the 420 strike, totaling 62, 323 contracts, while another 52, 382 calls are open at the in-the-money 415 strike.
FORBES: Apple Shares Face Technical Troubles Ahead Of Earnings
The blue line shows the number of shares which would be outstanding if all in-the-money options and warrants were exercised at the given share price.
Peak put open interest totals roughly 2, 900 contracts at the out-of-the-money December 5 strike, while another 2, 439 contracts reside at the deep-in-the-money December 10 strike.
FORBES: Solar Sector Earnings: Trina Solar, Canadian Solar, JA Solar, LDK Solar, & Suntech Power
These effects will be greater for in-the-money calls and out-of-the-money puts.
FORBES: Six Simple Steps to Protecting Your Portfolio With Put Options
Perhaps the investor is giving up on the near-term pop required to push those calls in-the-money by next Friday, in favor of the October call spread.
FORBES: Bulls Eye Rebound For Toyota And Sony, More Upside For Abercrombie
Peak May call open interest resides at the in-the-money May 26 strike, totaling 126, 632 contracts, while another 97, 495 are open at the overhead May 27 strike.
Traders who have entered the game in its later stages will find that the June 10 calls are now in-the-money and tote an asking price of 90 cents each.
The subsequent surge in Harley-Davidson shares inspired the investor to sell the now in-the-money call options and roll the bullish stance to a higher strike price.
To find the prices of these hypothetical options, you need an implied volatility, which I derived by finding implieds on near-term options which were about 5% in-the-money.
Peak call open interest for May lies at the in-the-money 32.50 strike, and there are virtually no out-of-the-money calls in open interest in the back-month June series.
Other notable call strikes include the in-the-money November 2.50 strike, with open interest of more than 4, 500 contracts, and the November 3.50 strike, which sports more than 4, 300 contracts.
FORBES: DryShips Inc. Earnings: Analysts, Options Traders Bullish
Additionally, he expresses little cause for concern regarding the massive short put position at the September 9.0 strike because shares would need to erode 25% by expiration for the contracts to land in-the-money.
One alternative you could consider amid the global uncertainty is a stock-replacement strategy, where you sell stocks that you like and buy in-the-money or longer-dated call options on those same equities.
应用推荐