Call selling tops the option activity in Ctrip.com today as the stock halts its recent slide.
CTRP, a Chinese travel-service provider, is up 1.8 percent to $25.50. It has fallen for the last five days after failed to hold above resistance at $28. Shares hit a 52-week low of $22.02 on Jan. 9, less than half of the value from its 52-week high in April.
Ctrip.com's total option volume of more than 4,400 contracts is twice its daily average. optionMONSTER's systems show that a trader sold 4,000 March 28 calls for the bid price of $0.85. The previous open interest was 249, so this is a new opening position.
These calls may have been sold naked, a trade that would provide the maximum profit of $0.85 with CTRP anywhere below $28 at expiration. Or they could have been sold against long shares as in covered call position, which would pay the maximum with the stock at or above $28 at expiration but would not see much in the way of upside above that strike. (See our Education section)
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