Windstream faces potential resistance around $14, and one
investor is using options to exploit that level.
optionMONSTER's tracking systems detected a surge of buying in the
telecom stock for about $13.30 as about 300,000 shares changed
hands in a five-minute period. Shortly after, about 3,200 May 14
calls were sold for $0.25.
The trade appears to be a covered call, where an investor buys a
stock and sells upside calls to reduce the cost. The result is that
the trader is now long WIN for about $13.05 and will be obliged to
sell shares for $14 if it advances to that level. (See our
The shares continued higher and are now up 1.21 percent to $13.40
in morning trading. WIN peaked around $14 in mid-2008, which could
cause some chart watchers to expect resistance around that price.
Today's option trade, for instance, is apparently designed to make
the most money from such a move.
Overall option volume in WIN is 5 times greater than average, with
not a single put changing hands.
(Chart courtesy of tradeMONSTER)
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