NVTL – Novatel Wireless, Inc. – The provider of wireless broadband access solutions to the worldwide mobile communications market popped up on our ‘hot by options volume’ market scanner in the first half of the trading session. Long-term bullish individuals opted to sell short put options in the January 2011 contract today with shares of the underlying stock rallying 2.25% to $5.94. Earlier in the session NVTL’s shares touched an intraday high of $5.98. Optimistic options traders sold at least 2,700 puts at the January 2011 $5.0 strike to pocket an average premium of $0.40 per contract. Investors short the puts keep the full premium received today as long as Novatel’s shares trade above $5.00 through January 2011 expiration. Put sellers are apparently happy to have shares of the underlying stock put to them at an effective price of $4.60 each in the event that the put options land in-the-money at expiration.
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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