Tuesday, January 19, 2010

C, Citibank: Very Large Number of June Options Traded Giving 20X Leverage

I have an alert received for Citibank (C) June 4 calls - high volume. There were more than 125,000 contracts traded today:

At $0.21, they give roughly 20X leveraged if the stock moves over $4 by June. The issue with buying options of penny stocks like C is that you are better off owning the stock outright as there is no time decay. In this case, however, the leverage is still reasonable. The move required is about 15%, which is not bad also.

The high volume appears to have been triggered by one rather large trade:

It is an interesting move. I'd still prefer straddles for risk control.

To receive buy/sell alerts on C sent automatically to you enter the symbols in the Technical Trend Analysis Tool, (powered by INO).

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crk said...

How do you set up these alerts? Do you use optionslam or some other third party service

The Shocked Investor said...

crk, you can see them at optionmonster.

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