The bulls are mixing and matching options in DuPont, which has
been going straight up.
Our Heat Seeker monitoring program detected the sale of about
15,000 October 50 puts for $0.95 and the purchase of a similar
number of July 57.50 calls for $1.06. Volume exceeded the previous
open interest at each strike, indicating that new money was put to
The trade cost just $0.11 to open and will profit from the
continuing to rally
in the next two months. The investor also made a longer-term
commitment in the next five months to buy the stock for $50 if it
drops below that level.
in longer-dated contracts reaped additional premium from the
greater time value
, letting the investor select a strike that was much further
out of the money
than the calls. The $50 level is also roughly where the peaked in
March and April, which could be leading some chart watchers to
believe that it will now provide support. (See our
DD is off fractionally at $56.35 this morning but is up 20 percent
in the last three months. It's near the same $57 area that's held
the shares in check for more than a decade. Traders may expect a
major rally if that resistance is broken.
Total option volume is more than twice the daily average in DD so
far today, according to the Heat Seeker.
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