CommonWealth REIT has gone nowhere for months, and one investor
optionMONSTER's Depth Charge tracking system detected the purchase
of 5,907 February 20 puts for $0.25 and the sale of an equal number
of February 22.50 calls for $0.90. Volume was more than 150 times
open interest at both strikes, indicating that new positions were
The trader probably bought shares in the commercial-real estate
company about one year ago, shortly before it ripped from $16 to
about $23. Yesterday's option strategy of combining
delays the exit until expiration on Feb. 21, so he or she is
probably trying to achieve more favorable tax treatment.
They investor will unload shares for $22.50 if they've above the
level on expiration and have a minimum selling price of $20.
Including the $0.65 credit collected, the trader will get something
between $20.65 and $23.15. (See our
section for other risk-management techniques.)
CWH fell 1.98 percent to $22.75 yesterday. The real-estate
investment trust has mostly remained between $20 and $26 for the
last 10 months.
Total option volume exceeded 12,500 yesterday, was 27 times its
daily average for the last month, according to the Depth
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