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Call seller bets on headwinds for SAIC

Posted
6/22/2012 12:10:00 PM
By: optionMONSTER
Referenced Stocks:SAI

SAIC is trying to recover, but one investor sees resistance on the chart.

optionMONSTER's tracking systems detected the sale of 2,000 August 12 calls for $0.40. Volume was more than triple open interest in the strike when the session began.

Writing calls obligates the trader to sell shares for $12 if they close above that level on expiration, but including the credit bought their exit price will be $12.40. He or she probably owns stock in the aerospace company and is using the options to earn income on the position. (See our Education section)

The trade makes sense because SAI bounced around $12 several times between December and April before dropping below it last month. It's also the current location of the 200-day moving average, which could be leading some chart watchers to believe that it will struggle to push above that level.

SAI is up 0.26 percent to $11.78. Overall option volume is 10 times greater than average so far today.