December 2, 2014 7:41 AM | 1 min read |
CNBC Options Action's Dan Nathan spoke on the show about an options trade he noticed in
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
(NYSE: NEM).There was a higher than usual options activity in the name as two time daily average volume was traded and puts outnumbered calls three to one. The stock had a really good session, trading 6.85 percent higher and closing at $19.60. When it was trading at $19.15, a trader bought 12,500 contracts of the March 18 put options and sold 12,500 contracts of the March 16 put options, paying $0.67 for the spread. The trade breaks even at $17.33, or 12 percent lower from the current price, and maximal profit is $1.67.Nathan commented that he is not sure why would anyone sell a put and limit profits in a trade like this one and his conclusion was that the reason might be in increased implied volatility in the name.
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