An interesting bullish combination trade dominates the action in Vodafone today as shares come off five-year highs.
optionMONSTER systems show that a trader bought 5,000 Weekly 36 calls that expire at the end of next week $0.26. At the same time he or she sold 5,000 October 35 puts, regular monthly contracts that expire in two weeks, also for $0.26. Volume at both strikes was well more than open interest, so this was a new opening combination.
The trader is using the sale of the longer-term puts to fully offset the cost of the long calls , which are looking for a quick pop in VOD. The risk is having to buy shares if they are below $35, though that might also be part of the strategy . (See our Education section)
VOD is up 0.4 percent this morning to $35.69, a day after hitting an intraday high of $36.08. These are the highest levels since January 2008 for the U.K. telecom carrier.
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