What's behind big call sale in Alcatel

optionMONSTER

A large trader sees limited upside in Alcatel-Lucent even after shares posted a 52-week closing high yesterday.

optionMONSTER systems show that more than 11,000 ALU options have already changed hands this morning, twice the daily average in the last month. The big print came in the September 2 calls, as a trader sold 10,000 of those contracts for the bid price of $0.15. The volume was slightly more than the previous open interest, so this was a new opening position.

About 40 seconds later 1 million shares were sold for $1.90, so the overall strategy appears to be a covered call position. That would take a maximum profit with ALU at or above that $2 level. (See our Education section)
 
ALU is off fractionally at $1.92 today. Shares of the Paris-based maker of telecom equipment traded up to a 52-week intraday high of $2.01 on Wednesday and were at $1 back in November. 


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