• 
• See all for optionMONSTER
• View Print Version

• Housing index is lone report on docket
• VIX futures plunge at end of last week
• Rally pushes S&P 500 above 1340 level

• RENN 71% Rate It

One investor apparently thinks that Renren is going nowhere.

Our tracking systems detected the sale of 10,000 October 4 puts for $0.52 and the same number of October 5 calls for $0.46. The trade accounted for almost all the option volume in the Chinese social-networking stock yesterday.

The trade resulted in a credit of $0.98, which the investor will keep as a profit if RENN is between $4 and $5 on expiration. Gains will erode outside that range, turning to losses below $3.02 or above $5.98.

RENN climbed 0.88 percent to $4.59 yesterday. It went public for $14 a share in May 2011 and steadily trended lower through the end of last year. The shares have been churning in a range since then, and the option trader is looking for that price action to continue through the autumn.

Known as a short strangle , the trade is an example of a market-neutral strategy designed to make money from the passage of time rather than a directional move. (See our Education section)

Overall option volume was almost twice the average amount in the session.

Related Options Articles

• 
  Stocks keep climbing before Bernanke
  5/22/2013 08:14 AM
• 
  Williams sees giant momentum trade
  5/22/2013 05:24 AM
• 
  Bulls reach for the clouds in Teradata
  5/22/2013 05:24 AM