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