One investor is showing faith in Advance Auto Parts even as it threatens to fall below a key level.
optionMONSTER's Heat Seeker system detected the sale of 2,000 September 80 calls for $0.90 and the purchase of 2,000 January 80 calls for $4.25. Volume was above the previous open interest in the September strike but below it in the January contracts, indicating that a long-call position was being rolled forward.
The investor is selling the nearer-dated options, which expire at the end of next week, and is using the proceeds to help buy a new position in the January calls . He or she is essentially paying a net $3.35 to get another four months for the trade to work. (See our Education section)
AAP slipped 1.15 percent on Friday to close at $79.12, just below its 200-day moving average. The auto-parts retailer hit a multi-month resistance level near $85 after reporting second-quarter results on Aug. 8 and has been trending lower since.
Friday's call roll made up almost all of AAP's option volume of 4,182 contracts, which compares with a daily average of just 225 for the last month. Only 20 puts changed hands in the session.
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