Kimco Realty has been melting up since the market bottomed two years ago, making one investor feel safe writing protection.
optionMONSTER's tracking systems detected the sale of 1,705 July 17.50 puts for $1 and $1.05. Volume was 20 times open interest in the strike.
KIM fell 0.81 percent to $18.42 yesterday and has gained 29 percent in the last six months. The put seller is promising to buy shares in the owner of strip-mall shopping centers at the strike price if they fall below $17.50. If it remains above that level, he or she will get to keep the premium.
The trade demonstrates how investors can make money from a stock they like simply by selling options and waiting for them to expire worthless. They often pick strikes based on key chart levels -- something that appears to be the case with this transaction because KIM formed a double-top peak around $18.40 in November and again in early January, then pushed higher this month. Some technicians would now expect support to develop at that level.
See this story for other examples of how traders can employ technical analysis to tilt market-neutral strategies in their favor.
Overall options volume in KIM was 7 times greater than average yesterday.
(Chart courtesy of tradeMONSTER)
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