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Tuesday, March 31, 2015 2:31:30 PM
<>MAT< think time to keep an eye on here, options activity and my kind of chart?
Nibble in here SMALL, and a few Calls<
3/30 Traders are looking for Mattel to rebound, even as the toy maker cascades to multi-year lows.
optionMONSTER's Heat Seeker monitoring program detected two bullish transactions on Friday, starting with the purchase of 2,500 January 2017 28 calls for $1.30 and 2,500 January 2017 37 calls for $0.30. Volume was more than twice the previous open interest at both strikes, an indication that new money was put to work.
Long calls lock in the price where investors can buy a stock. They're used to position for a rally with limited costs, though last week's paper was probably the first stage in a more complex strategy known as a butterfly spread . That way, the trader can sell 5,000 contracts at an intermediate strike such as 32 after MAT climbs. The resulting income could finance the initial investment and open the door for infinite profits.
MAT fell 0.62 percent to $22.61 on Friday and has lost 43 percent of its value in the last year. The company has struggled with weak sales of iconic brands like Barbie and Fisher-Price, resulting in the ouster of its CEO in late January. Nonetheless, subscribers to our InsideOptions Pro service almost doubled their money as the shares feebly bounced in early March.
About 20 minutes after the long-term trade in January 2017, the Heat Seeker detected the sale of 1,020 May 21 puts for $0.44 and the purchase of 1,020 May 24 calls for $0.61 while an equal-sized block was sold in the April 26 calls for $0.06. This suggests that a bullish position was closed in the shorter-dated contracts and rolled into a new bullish combination trade in May. (See our Education section for more on the risks and benefits of selling puts .)
Overall option volume on Friday was almost 6 times greater than average, with calls accounting for a bullish 80 percent of the total.
Nibble in here SMALL, and a few Calls<
3/30 Traders are looking for Mattel to rebound, even as the toy maker cascades to multi-year lows.
optionMONSTER's Heat Seeker monitoring program detected two bullish transactions on Friday, starting with the purchase of 2,500 January 2017 28 calls for $1.30 and 2,500 January 2017 37 calls for $0.30. Volume was more than twice the previous open interest at both strikes, an indication that new money was put to work.
Long calls lock in the price where investors can buy a stock. They're used to position for a rally with limited costs, though last week's paper was probably the first stage in a more complex strategy known as a butterfly spread . That way, the trader can sell 5,000 contracts at an intermediate strike such as 32 after MAT climbs. The resulting income could finance the initial investment and open the door for infinite profits.
MAT fell 0.62 percent to $22.61 on Friday and has lost 43 percent of its value in the last year. The company has struggled with weak sales of iconic brands like Barbie and Fisher-Price, resulting in the ouster of its CEO in late January. Nonetheless, subscribers to our InsideOptions Pro service almost doubled their money as the shares feebly bounced in early March.
About 20 minutes after the long-term trade in January 2017, the Heat Seeker detected the sale of 1,020 May 21 puts for $0.44 and the purchase of 1,020 May 24 calls for $0.61 while an equal-sized block was sold in the April 26 calls for $0.06. This suggests that a bullish position was closed in the shorter-dated contracts and rolled into a new bullish combination trade in May. (See our Education section for more on the risks and benefits of selling puts .)
Overall option volume on Friday was almost 6 times greater than average, with calls accounting for a bullish 80 percent of the total.
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