Thursday, December 8, 2011

Trade of the Day: Yahoo April bull call spreads

The Trade:
A trader bought 30,000 April $16/$20 call spreads and sold 30,000 April $14 puts.

A trader sold the April puts at $1.07 to partially finance the purchase of the April $16/$20 call spread at $1.37 for a net debit of $0.30. Yahoo is still awaiting an official takeover deal. Yahoo closed trading today nearly unchanged at $15.61. The break even price level for this spread is $16.30. The white line in the daily chart below is the break even price.

*Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, 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:

  1. I do not know if Yahoo will continue to exist as long as the site currently exists. It will probably be one day sold to a major company. More likely, I think that Yahoo will be sold piece after piece. I do not think to continue to trade with this value.