How trader is guarding EMC position

By
A A A

EMC is trying to strengthen, and one investor has protection in place.

optionMONSTER's Depth Charge tracking program detected the purchase of 16,500 April 25 puts for $1.44 and the sale of an equal number of October 25 puts for $0.14. Volume was below open interest in the October contracts, indicating that an existing position was closed and rolled forward in time.

The investor now has an additional six months of downside protection on the cloud-computing stock. He or she probably owns shares and is using the puts as a long-term hedge. (See our Education section for more on how options can be used to manage risk.)

EMC rose 0.33 percent to $27.67 yesterday and has been fluctuating between $20 and $30 since the market crashed during the summer of 2011. Its last earnings report on Aug. 15 beat expectations, suggesting that it was recovering from a slowdown in its government business last year.

Overall option volume was twice the daily average in yesterday's session, according to the Depth Charge. Puts outnumbered calls by more than 7 to 1.



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: EMC

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

69%

Most Active by Volume

85,467,945
  • $16.74 ▼ 0.30%
83,530,302
  • $12.49 ▲ 85.31%
68,697,805
  • $42.55 ▼ 0.77%
58,516,965
  • $101.63 ▼ 0.03%
49,234,469
  • $74.58 ▼ 3.74%
39,038,134
  • $8.56 ▲ 2.27%
37,813,410
  • $49.38 ▼ 5.24%
37,004,144
  • $46.24 ▼ 0.97%
As of 9/15/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com