Heavy call selling sees TrueCar ceiling
Traders are betting that upside potential will be limited for TrueCar through early next year.
optionMONSTER's tracking programs detected the sale of 10,000 January 12.50 calls for $1 today. Volume surpassed open interest of 6,219 contracts, indicating that new positions were established.
Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)
TRUE is down 1.38 percent to $10.70 in morning trading but is up 67 percent in the last three months. The online auto-marketing service is expected to announce quarterly results after the close on Nov. 3.
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