General Growth trade aims at key level

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One investor is selling calls on General Growth Properties, targeting a long-term resistance level on the owner of shopping malls.

optionMONSTER's tracking programs detected a surge of activity in the July 16 calls, with 5,000 contracts changing hands for $1.10. Volume was more than 200 times open interest in the strike. The price was much closer to the bid than the ask, which indicates that the contracts were sold.

The transaction obligates the investor to sell GGP for $16 if it closes above that level on expiration, but including the premium earned today their exit price would by $17.10. That's roughly the same level where the stock has peaked at least three times over the last two years.

GGP is up 0.54 percent to $14.96 today and 31 percent in the last three months.

Today's option trader probably owns GGP shares and is selling contracts as part of a covered call position. While the strategy limits their potential gains to the upside, the income received also provides a hedge against a drop. (See our Education section)

Overall option volume in the name is 4 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: GGP

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As of 9/17/2014, 11:31 AM

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