Red Hat Options Trader Just Made Millions

The RHT trader bought out-of-the-money calls ahead of IBM's buyout deal

Oct 29, 2018 at 3:03 PM
facebook X logo linkedin


Red Hat Inc (NYSE:RHT) stock has skyrocketed today, after IBM Corp (IBM) announced plans to purchase the software concern for about $34 billion. At last check, RHT stock was up 44.9% to trade at $169.04 -- and one recent options trader made a killing with a well-timed call purchase last week.

In the last half-hour of Friday's session, a block of 359 weekly 11/2 125-strike calls were apparently bought to open for 45 cents apiece, or $16,155 total (premium paid x number of contracts x 100 shares per contract). At the time, RHT was trading around $116, meaning the weekly calls were roughly 9 points out of the money, with just a week of shelf-life left.

Today, that same weekly call option is now more than 40 points in the money. As such, the aforementioned buyer's weekly calls were closed for $48.63 today -- in just a few trading hours -- according to Trade-Alert. That's a massive profit of 10,700%, or about $1.73 million. For reference, the average daily volume at this strike on Thursday, Oct. 25, was just three contracts, and open interest was just 67 contracts.

RHT stock chart oct 29

 

 

 

 

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.


Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!

 

 
 
 


 
 

Rainmaker Ads CGI