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Strangle Trade on Oracle?

by Ed Stenson 8/29/2006 2:29 PM

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There appears to be a strangle trade on Oracle (ORCL: sentiment, chart, options) in the December series. That's the simultaneous purchase or sale of a put and a call at different strikes, both contracts out-of-the-money. The December 15 put (ORQ XC) and the December 18 (ORQ LS) call both show a block of 11,000 contracts that crossed the tape at about 12:30 p.m. Eastern time. If the contracts were bought, there will be an overall profit on any large change in ORCL's price, up of down. On the other hand, if someone sold the contracts, the seller will be hoping ORCL's price doesn't budge.

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