AMT – American Tower Corp. – Looking back at the historical options activity on American Tower at the end of May when its shares were trading at $40.99 one investor appears to have sold puts in exchange for calls. In today’s options activity it appears that the investor is reversing this bullish play with its shares having recanted from the upper strike price target. Today’s sell-off in stocks highlights the pullback from a recent gain to $47.50 for this stock, for which a bullish strategy seems to have paid off well. Ahead of the two-month rally in its stock, an investor sold 10,000 put options at the $35 strike expiring in January 2011 and bought the same number of $45 strike calls with the same expiry. Each contract was worth $2.00 at the time. Today the short put position appears to have been covered at 70 cents while the calls traded at $4.00 each. The position was effectively cost nothing to implement was today sold for a gross $3.30 gain.
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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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