Explosive Move Expected From AOL

AOL has been rallying hard, and investors are betting on another explosive move.

optionMONSTER’s market scanners detected the purchase of 4,000 December 35 puts for $1.60 and an equal number of December 36 calls for $1.50. Volume was more than triple open interest at both strikes.

The strategy cost $3.10 and is designed to profit from a spike in volatility. Sharp movements in the near term would drive up premiums and cause the position to appreciate. It will also make money if AOL closes below $31.90 or above $39.10 on expiration five weeks from now.

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