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Arch Coal Inc. Message Board

  • lvloriarty lvloriarty May 10, 2013 12:58 PM Flag

    5$ SPREAD

    For months this stock has pegged the straddled spread. Anyone want to bet that this is the month that the spread is nearly 100% bullish and it blows past the 5$ straddle?

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    • Please, let me elaborate.... It would seem that the target price for ACI is 5$ due to the options straddle as that would be the price to make most every option on the board worthless. However... There are a couple of factors that may make this month a little different:

      1) Fundamentals in coal have been/are still improving.

      2) There is an enormous short position on ACI...some 30M shares

      3) The market is ripe for a correction, thus keeping many buyers on the sidelines while unnerving shareholders...making it the potentially perfect week for unloading a short position and capitalizing on options simultaneously.

      The other possibility: The 5$ spread was completely sold (calls and puts) and the MM's with the big money are going to keep it at 5$ by close of next Friday.

      just considering the possibilities.... and definitely following the money.

      Happy Trading.