In this scenario the trader is happy to pocket the rich premium available on the options given the length of time to expiration and increase in implied volatility on top of the sharp rise in the price of the underlying.
FORBES: Bullish Options Speculators Step Into Emulex, Amkor, American Eagle
Pfizer (PFE) announced that its fourth quarter profit fell by half mainly due to one time charges, and the expiration of its patent on blockbuster cholesterol drug Lipitor.
At any time, any user is able to extend the expiration date or request deletion of the record.
FORBES: Google Person Finder Helps In Boston Marathon Explosions
The sizable options play on ABV, which is majority-owned by Anheuser-Busch InBev, suggests the strategist is positioning for shares in the name to hit new all-time highs by May expiration.
FORBES: Options Player Hits Jackpot On AstraZeneca Ardea Deal, Bulls Pour Into Ambev
Investors have been trying to stay afloat amid crosscurrents of conflicting economic data, yet it all boils down to one key question: Is the decline in housing a statistical anomaly related to the expiration of the first-time home buyer credit or is it a leading indicator of another sharp decline in the housing market?
The contractionary effect of the end of 5 years of loose Fed monetary policies will hit the economy at the same time as the already enacted tax rate increases due to Obamacare and the expiration of the Bush tax cuts.
FORBES: Wasteful Politicians, And The Fed's Coming Recession
From the clear appeal of a stock that pays you for holding it at a time of puny interest rates, to the likelihood of higher taxes on those payouts due to the expiration of the Bush tax cuts, the capital companies deploy to shareholders in the form of dividends has become something of an 800-pound gorilla.
FORBES: Dividend Stock Outlook: In A Low-Rate World, Beware The Lure Of Rich Yields
But, my day trader recommends buying a put with a November expiration date, which might cost you less of a premium and give you more time to see the deluge.
FORBES: What To Do If You Believe The Stock Market Is Going Much Lower
If you purchase an option, you have the right to exercise it (with an American style option as most equities are) at any time in the expiration cycle.
The time horizon on this trade is a bit longer than the original, with roughly 8 months remaining to January 2012 expiration.
That 32 is how many calendar days to expiration, you can see that you have a lot of movement in a short amount of time.
FORBES: Options Straddles Can Score You Touchdowns Or Get You Sacked
应用推荐