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