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Binary Options Trading Monitor for July 16, 2010: BP and VIX Call Buying

|Includes:BP, Jefferies S&P 500 VIX Short-Term Futures ETF (VIXX)

The Binary Options Trading Monitor highlights traditional options trading of the underlying assets currently available on the leading binary options trading platforms. With a focus on short-term activity, binary options traders can use this intelligence to gauge stock sentiment and help assess potential stock movement in the coming weeks.

Notable Options Trading:

BP PLC (NYSE:BP) – Bullish: A bullish call spread in BP was purchased this morning with the investor buying 2500 August 35 calls and selling 2500 August 40 calls. The investor paid roughly $2.60 for the spread suggesting belief that shares of BP will trade above $37.60 by August expiration, an increase of only 1.4%. Potential loss on the trade is capped at the premium paid $2.60 with a maximum potential profit of $2.40 should shares of BP trade at or above the $40 level upon August expiration. BP binary options can be traded on the EZ Trader platform.

CBOE Volatility Index (VIX) - Bullish: Over the last week we’ve highlighted primarily bearish flow in VIX options with investors increasingly purchasing July and August 25 puts. Well sentiment seems to have changed today as buyers of upside calls emerged with traders targeting August 35 calls as the strike of choice. An over 2% drop in the market on a Friday afternoon tends to make investors fearful for what news the weekend will bring.  VIX binary options can be traded on the Anyoption platform.


Binary Options Weekly:

This week in the Binary Options Weekly we follow-up on our discussion of how binary option traders can take advantage of patterned stock movement during the last few trading hours of traditional options expiration by providing a list of names to watch closely during this month’s expiration for pin risk strategy implementation. We provide detailed steps on how to potentially profit off this pinning behavior. In addition we discuss recent options flow and how this trading can possibly be a sign of things to come in the markets over the next few weeks.

For daily Binary Options Trading commentary/strategies and to receive your free subscription to the Binary Options Weekly, please visit us at www.DerivStrategies.com.

 

 




Disclosure: No Positions
Stocks: VIXX, BP