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Morning trade alert: Calling for long-term limited downside in the computer maker
Related Symbols: DELL
Options action around 10:09 a.m. EST suggests one investor took in a hefty premium for a longer-term bet that Dell Inc. (NASDAQ: DELL) shares could experience limited downside throughout the longer-term.
A block of 5,000 in-the-money January 2012 20 puts crossed the tape during morning trading for the bid price of $6.50 per contract. These puts are home to current open interest of 120 contracts, suggesting the action was initiated to open. It looks like an investor sold these longer-dated puts beeting that DELL shares could close higher than $13.50 at January 2012 options expiration.
Implied volatility of these puts is 32%, compared to a 30-day historical volatiliy of 31%. The January 2012 20 puts have climbed 10 cents so far today.
DELL did not announce any news today, and the company could announce earnings sometime around May 20. Shares of the computer maker are currently down three cents to $14.18.
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