CSX – CSX Corporation – Shares of the provider of rail-based transportation services are up 2.00% to $48.41 as of 11:40 am (ET) inspiring what appears to be a change of heart for one previously bearish options strategist. It looks like the investor booked profits today by unraveling a well-timed debit put spread originally purchased on June 28, 2010, when CSX shares were trading at a volume-weighted average price of $52.83.CSX Corp.’s shares plunged 11.00% from an intraday high of $52.95 on June 28, 2010, to an intraday low of $47.08 during yesterday’s trading session. The investor appears to have established the put spread at exactly the right time, buying the roughly 3,000-lot July $49/$46 debit spread for an average net premium of $0.44 per contract back on June 28. Today the trader unraveled the bearish position, selling-to-close the spread for an average net premium of $1.295 per contract, signaling perhaps the expectation that CSX shares will continue to rebound. Net profits on the closing sale amount to $0.855 per contract.
Affiliation: Interactive Brokers
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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