Options: Vornado Call Spread

By Jud Pyle, CFA, chief investment strategist for the Options News Network.

Vornado Realty Trust(VNO Quote) March 55 calls have traded more than 12,000 times vs. open interest of 2,724, according to the Sidewinder report at www.ONN.tv. These calls are only part of the story though. They are part of a spread with the Feb 55 calls, which have also traded more than 12,000 times.

The motivation for this volume was a customer buying to close the Feb 55 calls for about 10 cents, to sell the March 55 calls at $1.20 to open. Note how the open interest in the Feb calls is 14,460. This investor sold these Feb calls originally for $3.20 back on Jan. 21, when the stock was trading around $53.46.

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