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Jefferies Group, Inc. Message Board

  • tlee22202 tlee22202 Dec 2, 2011 10:49 AM Flag

    What was this options trade this morning?

    April 2012 13.00 calls, volume 4,006
    April 2012 9.00 puts, volume 4,500

    For this early in the morning and this far out in time, I am guessing it is the same party which did both of these trades.

    I like to buy OTM calls and finance them by selling OTM puts. This is an excellent trade for JEF at this time because of the difference in option pricing between calls and puts.

    With Jef at 12.20, compare the price of the April 2012 calls and the puts for the 12.00 strike. The puts are priced much higher.

    Because of this discrepancy, you can now buy an April 13.00 call for close to the same price that you can sell an April 9.00 put