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Time is money for Paychex trader

David Russell (david.russell@optionmonster.com)

Someone is turning time into money with Paychex.

optionMONSTER's tracking systems detected the purchase of 1,043 September 45 calls for $0.07 and the sale of an equal number of March 45 calls for $0.69 yesterday. Volume was below open interest in the nearer-dated contracts, which suggests than an existing short position was closed and rolled forward in time.

The trader probably owns shares in the provider of payroll services and wrote the options as part of a covered-call strategy . The investor collected an incremental $0.62 by adjusting the trade. (See our Education section)

PAYX fell 0.14 percent to $41.43 yesterday but has been slowly grinding higher since May. The company has met or beaten expectations on the top and bottom lines in the last three quarters.

Yesterday's covered call is noteworthy because the strike price is near PAYX's long-term high in January. The investor probably expects that level so be resistance, so he or she is willing to relinquish potential gains above it.

Total option volume was triple the daily average in the session.


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