Cablevision Systems Corp (CVC)
A short strangle implemented on the cable operator during afternoon trading indicates one strategist expects shares in Cablevision Systems Corp. to remain range-bound through June 2011 expiration.
- It appears the strangle-player sold 20,000 calls at the June 2011 $38 strike at a premium of
- Sold the same number of puts at the lower June 2011 $29 strike for a premium of $0.85 apiece
Gross premium pocketed by the investor amounts to $2.10 per contract. The trader keeps the full amount of premium received on the transaction as long as shares in CVC trade within the confines of the strike prices described through expiration day next year.
Short stances taken in both call and put options expose the trader to losses in the event that CVC's shares soar 16.0% higher to trade above the upper breakeven point at $40.10, or should shares plunge 22.2% lower to breach the lower breakeven price of $26.90 ahead of June expiration.