Kimberly-Clark is consolidating after a big run, and the bulls are coming back.
optionMONSTER’s Heat Seeker monitoring system detected the purchase of 2,100 February 110 calls for $0.55 and the sale of 1,000 February 100 puts for $0.66. Volume was more than twice open interest at both strikes, indicating that new positions were initiated in the diaper maker.
Buying calls locks in the right to owns a stock at a certain level, while selling puts generates income but creates downside risk. Combining the two strategies is similar to owning shares, but at a much lower cost. For instance, today’s trade will deliver the same performance of 52,700 shares at less than one-hundred the cost.
— Option Monster