DuPont has been climbing, and one investor wants to give the
stock more room to run.
optionMONSTER's tracking programs detected the purchase of about
5,000 January 45 calls for $0.95 and the sale of a matching number
of February 47 calls for $0.37. Volume was below open interest in
the January contracts, indicating that an existing short position
was closed and rolled forward in time.
The investor probably owns shares in the chemical giant and sold
the options as part of a
covered call
strategy. He or she is adjusting that position to increase by $2
the price at which the stock must be sold. The trader paid a $0.58
for that additional upside and now must remain in the position for
another month.
DD fell 0.61 percent to $45.97 yesterday but is up 10 percent in
the last two months. Given that the January contracts are
in the money
, the investor would have been forced out of the trade at
expiration tomorrow if the short calls hadn't been rolled forward.
Rolling up and out also keeps them in the game for DD's earnings
release next Tuesday. (See our
Education
section for more on how calls and puts can be used to manage
positions.)
Total option volume was almost triple the daily average in the name
yesterday.
