I sold the ATLS May $38's for .95 when Hedgeye picked ATLS as their next victim. Hoping that works out, but I saw this trade I wanted to share with you.
Atlas had interesting options action this week. A two-legged spread was employed across a pair of long-term, out-of-the-money strikes, and consisted of 40,000 total contracts. In a nutshell, the trader established long and short call positions in order to bank on a significant advance in the shares by January 2015 options expiration.
The trader bought to open 20,000 January 2015 50-strike calls -- near the ask price, at $1.45 each -- while simultaneously selling to open a matching block of January 2015 60-strike calls -- near the bid price, at $0.30 a piece. In so doing, this individual paid a net debit of $1.15 per pair of contracts in order to initiate a bull call spread. After accounting for the size of the deal, the total risk works out to $2.3 million ($1.15 net debit * 20,000 contracts * 100 shares per contract).
Breakeven on the trade is $51.15
Based on the initial cost of $2.3 million and the maximum possible profit of $17.7 million, the trader could earn up to a 670% return for his investment in Atlas.
Was that you:) |
