Shares of Dell have advanced every day of this new year, but one huge trade sees limited gains from here.
DELL finished yesterday at $15.58, up 1.5 percent on the session and nearly $1 above its 2011 closing price of $14.63. Even with those gains, however, the stock is just back to where it was in mid-December. Shares have been trading in an increasingly tight range in the last six months, with lower highs and higher lows.
The PC maker's option volume was 55,136 contracts yesterday, about 5 times its daily average, and calls outpaced puts by 6 to 1. Much of the volume was in the January 2013 17.50 calls, which traded more than 33,000 times against open interest of 13,014. One block of 30,215 of the calls went for $1.32, which was the bid price at the time, indicating that they were sold.
There were also a number of huge stock trades from 1:30 CT on, which is roughly when this call selling began. Four trades of more than 1.3 million shares changed hands, so the calls very well may have been sold against shares either as a covered call or a hedged short-volatility position. Regardless of the strategy, the activity foresees limited range-bound trading. (See our Education section)
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