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.
Zynga Inc (NASDAQ:ZNGA) shares saw some extremely unusual volume Monday.
Around 16.5 million shares of common stock traded during the session, compared to its previous 30-day average volume of under 7 million shares.
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Making the volume that much more notable, a handful of block trades were noticed, to the tune of nearly 6 million shares over the course of Monday's session.
As highlighted by Benzinga Pro, four block trades near or over the 1 million share threshold were tracked, each around the price of $2.80.
Following the block trade activity, Zynga shares closed at $2.79.
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What Is A Block Trade?
A block trade occurs when a large investor -- most often on the institutional level -- wants to buy or sell a large chunk of a security at a pre-arranged price. In order to clump the shares together and come to an agreement on the price, an investment bank is normally a requirement for doing such a transaction -- rather than the investor finding and buying the shares out in the open market.
What Does Seeing A Block Trade Mean For My Investment/Trade?
Block trades can be incorporated into an investor's strategy as an indication of activity in the name.
Using a block trade for gleaning bullishness or bearishness isn't advisable; if the banker on the deal is good at his or her job, market players shouldn't be able to tell if the order came from a buy or sale as the agreed-upon price for the block trade should be appropriate to the current price the stock is actively trading at.
Instead, consider block trades as a way to gauge liquidity in a stock.
In the case of Zynga, it's safe to say investors and traders are showing an unusual level of interest in the name -- for whatever reason.
Image: Vladislav Bezrukov, Flickr
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.