A large put spread is targeting the SPDR Dow Jones Industrial Fund.
More than 10,000 each of the April 142 and 139 puts traded yesterday in volume that was more than 10 times higher than the previous open interest at each strike. The 142 strike saw a huge print of 6,210 puts bought for the ask price of $5, while the 139 puts were sold for their bid price of $3.15.
This vertical spread cost $1.85, which is the most that can be lost on this trade. The maximum gain of $1.15 will be realized if the DIA remains below $139 through expiration in mid-April. (See our Education section)
The exchange-traded fund was down fractionally yesterday to close at $138.49. It was about $0.20 lower when the put spread was opened but had reached $140.36 last week, almost matching its high from October 2007.
More than 75,000 DIA options traded yesterday, compared to a daily average of 17,700.
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