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Long-term trader is bullish on the SPY

Chris McKhann (chris.mckhann@optionmonster.com)

Total option volume remains light today, but the SPDR S&P 500 Fund is seeing huge long-term call activity.

The big trade involved 22,500 each of the December 2014 125 calls and the December 2015 145 calls. A trader sold the 125 calls for the bid price of $23.95 against open interest of more than 67,000 and bought the 145s for the ask price of $16.05 with no open interest at that strike.

This is likely a roll, as the trader is selling the 2014 in-the-money calls and moving the position to the later-dated, higher strike. The strategy allows the trader to take money off the table while maintaining exposure to further gains for an additional year. (See our Education section)

The SPY is down 0.44 percent to $141.72 this afternoon. The exchange-traded fund was down at support at $135 in mid-November but above $145 a week ago as it tested resistance from October.

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