Schwartz: Tale of Two Prints
TheStreet Premium Services
A complimentary preview
of Options-Profits Previews
Making matters much worse for this position holder is the market width for these long-term options. Note the quote on 10/2 was about $0.06 wide from bid to offer, a 10% spread in terms of option value. The quote on the latest trade is very different, $0.10 to $0.55, wide enough to drive a truck through as market makers shy away from long-term options when it is unclear what the post-deal structure will look like. This type of risk has no Greek name, but clearly is somewhat catastrophic for the position-holder.
The second big print highlighted on 10/13 is holding up a bit better. The XLP was trading around $36 at the time and saw an enormous block of 249,900 January 38 calls trade near the $0.15 offer price. Shares are up $0.03 to $35.88 today, but down about $0.12 since that time. The market on the January 38 call is still $0.12 to $0.15, from $0.15 at the time. However, open interest is 256,831 and by far the largest position in XLP options. Three months are still remaining for the trade to play out.
OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits.
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV