Tuesday, June 21, 2011

Trade of the Day: Wyndman Worldwide short August $32 straddle

The Trade
A trader sold 4,000 August $32 straddles at $3.45 which was tied to 100,000 shares of stock.

The trader's short straddle profits if the underlying stock doesn't make a big move before August expiration. The profitable range for the spread is between $28.55 and $35.45. The max risk is unlimited to the downside and upside. The max profit occurs at an underlying stock price of $32.

The chart above is the WYN stock chart. The two white lines are the profitable range for the straddle. The 52-week range for WYN is a low of $19.44 and a high of $35.50. WYN traded 8,981 option contracts compared to average daily volume of 1,636.

http://seaofopportunity.blogspot.com/ *Special thanks to Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

1 comment:

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