You said (in reference to my purchase of the $39 NOV puts) to:
Buy the 41 calls and sell the 40 calls and bring in a .45 credit. Your breakeven is 40.45 and you are risking 55.00 to make 45.00/contract on the trade. As long as the stock stays below 40.00, you keep the entire premium. So in this case, the stock doesnt even have to go down (and it can go up .55 and you can still break even.)
I guess it would be too complex for you to explain all that to a noob like me (and you probably were referring to the prices of the 40/41 calls at the time)....But, (1) what do you mean by "Buy" the 41 calls and "Sell" the 40 calls?
(2) I find it odd that the $39 puts went up (as well as the $39 calls), meanwhile the $37.50 and $40 puts went down
(3) Looks like there was some decent volume on the $39 puts (547 contracts), compared to 35 contracts on the $39 calls (although the calls are 4x more expensive)....With Scottrade I can't find out if they are buys or sells....Could you tell me if people were dumping the $39 puts or loading them up by any chance??? I'm assuming people are dumping the puts while they still have some value to them but maybe your data shows otherwise...
AI
