Wednesday November 11, 07:20 PM
STOCKS NEWS US-EMC attracts large-volume bearish risk reversal
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Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1359 ET 11Nov2009- EMC (NYSE: EMC - news) attracts large-volume bearish risk reversal
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Computer hardware company EMC Corp attracted a large-volume bearish
risk reversal to the January 2010 contract, said Andrew Wilkinson, senior
market analyst at Interactive Brokers Group in a note to clients.
Shares are currently trading down 0.06 percent at $17.04.
An investor sold 20,000 calls at the January $17.50 strike for an average
premium of 75 cents apiece to partially offset the cost of purchasing the same
number of in-the-money put options at the same strike for $1.10 each. The net
cost of assuming the pessimistic stance on EMC amounted to 35 cents per
contract, he said. The trader responsible for the reversal may hold a long
position in the underlying stock. If this is the case, the put options serve as
downside protection should EMC shares fall beneath the breakeven point of
$17.15 by expiration.
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