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Computer storage maker EMC Corp. (EMC - 94-13/16) is off over three percent today as it continues to struggle in its attempts to overcome the century mark. From its late-May low of just above 50, EMC more than doubled to reach an all-time high at 104-15/16 on September 25. In early October, EMC fell back below the key 100 level and has made three unsuccessful attempts to overtake this important resistance.
Interestingly, today's price action has brought out a large options player speculating that EMC will continue to have trouble with 100. At some point this morning, a large position was opened using the January 105 call and the January 95 put. Total volume on each option was more than 14,000 contracts. Though it is difficult to tell as the trades came across the tape late, it appears that the institution sold the January 105 call for an average of 7-1/4 per contract. With the premium collected, the trader purchased an equal number of January 95 put contracts with an average price of approximately 9 per contract. The resulting premium required would be 1-3/4 per contract, or about $2,450,000. This option position would be profitable if EMC is at 93-1/4 or less at January's expiration.