Calendar spread in Odyssey Marine

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Odyssey Marine Exploration exploded higher earlier in the month, and now one investor wants to turn time into money.

optionMONSTER's tracking programs detected the sale of 3,500 March 2.50 puts for $0.70 and the purchase of an equal number of October 2.50 puts for $0.25. Volume was more than quadruple open interest in both strikes.

Known as a calendar spread , the trade yielded a credit for $0.45. It's similar to selling puts to earn income, but uses a long position in the shorter-dated contracts to hedge against a near-term drop. The investor probably hopes that OMEX will continue to climb, erasing the value of the March puts. (See our Education section)

The shares are off 1.85 percent to $3.18 in midday trading. They had rallied about 30 percent following reports on Monday that the company had discovered a new sunken ship off the coast of England. OMEX is in the unusual business of salvaging old shipwrecks.

Overall option volume is more than 10 times greater than average so far today.



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 © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: OMEX

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As of 9/18/2014, 10:33 AM

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