One investor apparently thinks that Electronic Arts will do a
whole lot of nothing for the next two months.
optionMONSTER's tracking systems detected the sale of about 10,000
contracts each in the November 13 puts and the November 14. The
puts traded for $0.80 and the calls fetched $0.55, resulted in a
combined credit of $1.35.
Known as a
, the trade reflects a belief that the video-game maker will remain
between $13 and $14 through expiration. If it does, the trader will
keep the credit while the options expire worthless. Profits will
erode outside that range, but the position won't lose money unless
the stock goes below $11.65 or above $15.35.
EA rose 0.49 percent to $13.31 yesterday but has lost more than
one-third of its value in the last 12 months. The stock has been
languishing for years and is back around levels last seen in the
1990s as the industry faces increased online competition.
While the news has improved since the summer, some investors may
expect bearish momentum to continue in the near term. Selling a
strangle would be a logical way to bet on such a belief. (See our
section for other
Overall option volume was 12 times greater than average in the
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