Trade tightens Altera protection

By David Russell,

Shutterstock photo

Altera is pushing to a nine-year high, and one investor is tightening up protection.

ALTR optionMONSTER's Depth Charge tracking program detected the purchase of 6,500 November 32 puts for $1.30. An equal number of November 31 puts were sold at the same time for $0.70 against existing open interesting, indicating a position was rolled to the higher strike.

The trade, likely implemented by a shareholder, provided an additional $1 of downside protection at a net cost of $0.60.

ALTR is down 0.26 percent to $31.16 in morning trading. Earlier in the session it hit $31.50, its highest price since August 2001.

The chipmaker reported better-than-expected net income and revenue on Oct. 19 and issued a bullish forecast. Management cited strong demand from the telecom and wireless markets.

By using in-the-money puts, today's option strategy will let the investor make money from virtually any decline in the share price. Puts outnumber calls by a bearish 30-to-1 ratio in ALTR so far today.

(Chart courtesy of tradeMONSTER)

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: ALTR

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