One investor is rolling a position in Johnson Controls today, waiting for the stock to find its footing.
optionMONSTER's monitoring systems detected the purchase of 2,400 January 36 calls for $0.08 and $0.10 against open interest. An equal number of April 35 calls were sold at the same time for $1 in a new opening transaction.
The activity suggests that the investor owns shares and is using the options as part of a covered call strategy. He or she had previously sold the January contracts and is now adjusting the position to April. As a result, the trader collected incremental income of about $0.90 and agreed to remain in the trade for an additional three months.
One bearish point, however, is that they also lowered the strike by $1, which reflects a belief that there is less upside in the name over that period. See our Education Section for more.
JCI is down 1.67 percent to $29.49 today and almost 10 percent in the last month. The maker of auto parts and air-conditioning units has been following the broader market since the summer. Its earnings track record has been mixed, with revenues strong but margins weak.
Overall option volume in the name is almost twice the average amount so far today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.