Lexmark traders eyeing key level


Shutterstock photo

Lexmark struggled at $38 last month, and traders remain wary of that level.

optionMONSTER's scanning programs detected the sale of 2,800 December 38 calls in volume well above previous open interest of just 227 contracts. Premiums fell from $0.35 to $0.30 as the paper crossed, which shows the strong selling pressure.

The investor probably owns shares in the printer company and is selling the contracts to manage his or her risk in a covered-call strategy . The trader is now on the hook to unload stock for $38 if it's above that level on expiration. Including the premium earned, the exit price would be $38.35 to $38.40. (See our Education section)

LXK is up 0.3 percent to $36.74 in midday trading. The stock leapt to $39.68 on Oct. 22 after a strong earnings report but was quickly smacked down. It closed at $38 that session and peaked below that level last week, which could make some chart watchers think that shares are now at resistance.

Total option volume is quadruple the daily 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 Nasdaq, Inc.

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

This article appears in: Investing Options
Referenced Stocks: LXK

More from optionMONSTER




Follow on:

Find a Credit Card

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