Bulls are leveraging Kimberly-Clark

By
A A A

Kimberly-Clark is consolidating after a big run, and the bulls are coming back.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,100 February 110 calls for $0.55 and the sale of 1,000 February 100 puts for $0.66. Volume was more than twice open interest at both strikes, indicating that new positions were initiated in the diaper maker.

Buying calls locks in the right to owns a stock at a certain level, while selling puts generates income but creates downside risk. Combining the two strategies is similar to owning shares, but at a much lower cost. For instance, today's trade will deliver the same performance of 52,700 shares at less than one-hundred the cost. (See our Education section for more on the leverage potential of options.)

KMB is up fractionally at $105.46 this afternoon. It shot to an all-time high over $110 in November, dropped in December, and has been churning in a range since.

The consumer-goods company's next earnings report is scheduled for the morning of Friday, Jan. 24. The last release in October beat expectations.

Total option volume is 4 times greater than average in the name so far today, according to the Heat Seeker.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright Ā© 2010 OptionMonsterĀ® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: KMB

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Living the Life of Pie
Living the Life of Pie              

Stocks

Referenced

100%

Most Active by Volume

56,860,232
  • $62.10 ▼ 2.86%
28,876,858
  • $15.4701 ▼ 0.83%
20,702,545
  • $64.525 ▼ 0.68%
18,548,472
  • $3.37 ▲ 0.60%
16,606,405
  • $94.535 ▼ 0.90%
14,557,786
  • $32.73 ▲ 0.21%
14,090,535
  • $94.5144 ▼ 0.47%
13,642,158
  • $4.285 ▲ 1.30%
As of 7/10/2014, 11:19 AM