Agreement in the quantitative data was determined using diagonal bias (m), diagonal spread
(d), diagonal SD (dsd), diagonal correlation ([r.
This is likely a diagonal spread
at work, given the different expiration dates and strike prices (but the similarity in block size and timing).
1:52 PM Diagonal Spread on AMEX Semiconductor HOLDRS Trust
In our Options Update podcast, Jon Lewis mentioned a possible diagonal spread on the AMEX Semiconductor HOLDRS Trust (SMH).
Investors employing a diagonal spread
typically think the underlying will remain flat or rise only slightly in the near term, but will fall over the longer term.
Dr Olmstead is recommending a diagonal spread
Olmstead and team recommend a diagonal spread
trade that can evolve into a simple long call play after the August options expiration date.
In order to offset some of the cost of a June call, an April call will be sold to form a very short-term diagonal spread
STOCK SYMBOL RESULTS STRATEGY (Nasdaq:LGTO) 130% short-term volatility spreads (NYSE:GTS) 100% short-term volatility spreads (NYSE:MTC) 84% two-week disparity spread (Nasdaq:AWRE) 40% bullish diagonal spread
(Nasdaq:CSCO) 40% bullish diagonal spread
(Nasdaq:CMGI) 53% bull-call spread (Nasdaq:ATHM) 42% bull-call spread (Nasdaq:QCOM) 34% bull-call spread (Nasdaq:DELL) 25% bull-put spread (NYSE:LTD) 25% bull-put spread (Nasdaq:VISX) 14% bear-call spread (NYSE:CHA) 11% bull-put spread
All manner of spreads are covered, from calendar and horizontal spreads to vertical and diagonal spreads
Other top positions by category included: Diagonal spreads
, Chiron (NASDAQ:CHIR) a 47% return and Echostar (NASDAQ:DISH) at 25% profit; Bull-Put Spreads, IMS Health (NYSE:RX) with a 37% profit and RF Micro (NASDAQ:RFMD) at 25%; Bull-Call Spreads, Nielson Media (NYSE:NMR) at 60% profit and Sequent (NASDAQ:SQNT) at 58%, Bear Put Spreads; Thomas & Betts (NYSE:TNB) at 66% profit and IMS Health (RX) at 50%, Bear-Call Spreads; Honda Motors (NYSE:HMC) at 25% profit and The Equitable (NYSE:EQ) at 21%; Calendar spreads, International Paper (NYSE:IP) at 61% profit, and Straddles and Strangles; Vulcan (NYSE:VMC) at 34% profit.