An odd spread tops early option action in Xerox this morning as shares hold recent gains.
XRX is unchanged on the day, trading at $7.79. Shares have been rallying off an eight-month low under $7 in the last three weeks. The photocopier company's stock was above $8.50 in mid March.
A trader sold 2,500 October 9 calls for $0.15 against open interest of 113,949, according to optionMONSTER's Heat Seeker system. At the same time he or she bought 2,500 August 8 calls for $0.24 with no open interest at that strike.
This could be a diagonal roll, with the trader selling the later-dated, further out-of-the-money calls and using the proceeds to buy nearer-term options to get more bang for the buck. It is also possible that this is a new diagonal call spread , which would be a bullish play but with less upside exposure and the downside losses. (See our Education section)
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