Trade stays with Globe Specialty Metals


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Globe Specialty Metals has gotten knocked down, and one investor is lowering the bar.

optionMONSTER's tracking systems detected the purchase of about 2,700 September 25 calls for $0.35 to $0.45 and the sale of roughly the same number of December 22.50 calls for $1.25. Volume was below open interest in the September contracts, indicating that an existing short position was probably rolled to the lower strike.

The trade was likely the work of an investor who owns shares and had sold the calls to earn income and manage risk. Adjusting the position today let him or her collect an additional credit of $0.80 to $0.90. The trader also agreed to a lesser selling price of $22.50. (See our Education section)

GSM is spiking higher by 13 percent to $19.39 today. It doubled between last September and July, before getting pounded along with most other stocks in the recent market selloff.

The company produces silicon alloys used by chemical makers, aluminum companies, and semiconductor firms. Profit doubled the last time it reported earnings on May 9 amid higher prices for its metals.

Overall option volume in GSM is 7 times greater than average so far today, with calls outnumbering puts by more than 90 to 1.

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: GSM

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