Range trade in Standard Pacific

optionMONSTER

Traders are looking for Standard Pacific to stay range-bound for the next month.

optionMONSTER systems show that 6,000 February 9 calls were sold for the bid price of $0.25 yesterday. This is clearly a new position, as the volume was 4 times higher than the strike's open interest before the trade appeared.

Less than two minutes later, a block of 258,000 SPF shares was bought for $8.87. Combined with the call sale, this creates an overall position that is a delta-neutral . That means the trader is looking for the stock to remain range-bound or for volatility to be lower than that implied by the call premiums through the February expiration four weeks from today. (See our Education section)

SPF rose 0.69 percent to $8.75 yesterday. The homebuilder was above $9 at the beginning of the month and below $8 five weeks ago.

Total option volume topped 6,100 options yesterday, compared to the daily average of just 196 contracts in the last month. 

More From optionMONSTER

View Comments (0)