Stock Option Trading News

Excessive Call Option Volume for EMC

EMC Corporation’s (EMC) call option volume spiked yesterday and its stock price was unchanged.

If you’re looking for products to store and manage your data, then EMC may have just what you need. EMC offers information storage systems, networked attached storage systems, content addressed storage and direct attached storage systems. EMC also markets software products for managing storage system data and consulting services.

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EMC and Cisco (CSCO) recently formed a joint venture to provide data center equipment to businesses and EMC recently caused the price of Simple Tech’s (STEC) stock to drop precipitously when it announced it would delay orders for Simple Tech’s solid-state drives by several months.

EMC’s stock price is up around 100% from its December 2008 low and is approaching its two-year high around $20.

EMC Chart

There was significant volume in EMC’s November, December and January at-the-money and out-of-the-money call options yesterday. Something appears to be up with EMC, maybe the company is being acquired or even making an acquisition.

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A covered call investing position for EMC for December might be a good play with a %if unchanged potential return of 2.3% and a %if assigned potential return of 6.8%. The timeframe for realizing the potential return is only 31 days. The call option to sell would be the December 18 with ticker symbol EMCLL.

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To enter the covered call investing position an investor would purchase the stocks in multiples of 100 shares for their trading portfolio and sell one call option for each 100 shares of stock purchased for their personal stock portfolio.

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PowerOptions’ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.

[tags] information storage systems, at-the-money, out-of-the-money, CSCO, Cisco Systems Inc., EMC, EMC Corp., STEC, Simple Tech Inc. [/tags]

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