ucsgears

TEVA - A huge earning options bet

NYSE:TEVA   TEVA PHARMACEUTICAL INDS LTD
167 5 2
a year ago
Failed to notice this prior to closing. :(

Some big boy option trading firm expecting an explosive move on TEVA             post earnings.

a total of 8307 Long Straddle Spread contracts were executed for a price of $3.65. That's approx = $3,000,000. For those who needs a further explanation, This is a non directional bet (either bullish or bearish ) for the stock to open above $61 or below $54 by the end of next week.

Expected move is only $3.00
a year ago
Comment: Although it opened up within the expected move. (Profitable),

Its working its way to fulfill the some confident traders ambition. I guess.
a year ago
Comment: Just to clarify on How I know this was a long position.

--- Scan for Unusual options volume 3:00pm - 4:30pm
--- Options Tape Reading. Executed price, Bid / Ask and Volume. And ofcourse Strike Price

Related Ideas

2use
a year ago
But what would you do in such uncertain cases?
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ucsgears PRO 2use
a year ago
I would avoid any exposure pre earning. Risk is greater. If I had a position, This will be the first priority to manage. In this case, I have an earning position.
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ucsgears PRO 2use
a year ago
Now its a no brainier. Closed for a smaller profit.
Reply
gears, your snapback indicator with the mid-probability checked shows some bottoming action in TEVA. This trader with the large position could have a problem.
snapshot
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ucsgears PRO dave.seremek
a year ago
Mostly such positions are taken by institutions. They can afford to execute the options. For this trade, they are profitable if TEVA is below 54 on their puts or 61 on their calls. They have a week to adjust options. Let's not worry about them, because they could be defending an existing stock position with options, i.e., Risk Small to protect their gains......... . I posted this as an example of when institutions loads up hefty cash prior to earning. They know something we dont. We need to use more caution on this executing pre earning trade.it isn't legal for the institution or anybody to do insider trading, still we have no proof to defend. All we can do is to grab as much info and make better decisions.

Remember, No One can predict future, We can manage the risk.
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