One investor is turning time into money with chemical stock FMC.
optionMONSTER's tracking programs detected the purchase of about
1,800 October 65 calls for $6.60 and the sale of a similar number
of November 65 calls for $6.84. Volume was below open interest in
the nearer-dated contracts, so it looks like an existing short
position was closed and rolled forward in time.
The investor probably owns shares and sold the options as part of a
trade. The strategy lets them earn income from the stock while also
limiting volatility. Nonetheless, it prevents them from profiting
to the upside, so the resulting position is quite conservative.
Adjusting the trade let him or her collect $0.24 of income, which
is on top of the original credit they received. The investor also
have the right to collect FMC's 0.8 percent dividend yield and can
also endure a significant pullback without losing a penny. (See the
section for more.)
FMC, whose products include insecticides, polymers, and food
additives, rose 0.38 percent to $71.69 in early afternoon trading.
It's up 27 percent in the last six months and is less than $1 below
the all-time highs.
Total option volume is 16 times greater than average so far today,
with not a single put trading so far.
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.
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