Paper bought 4,000 CBS March 4 weekly 45 calls for 1.35 and sold 8,000 CBS March 4 weekly 46.5 calls at .63.?
CBS Corp, trading at 45.38 with an IV30 of 33.85 and an HV10 of 49.05, saw a 1 by 2 trade today.? The stock, with an ADV of 10,000 and OI of 217,000 contracts, saw a large a customer buy the March 45/46.5 1 by 2 call spread today.? A customer bought 4,000 of the March 4 weekly 45 calls for 1.35 and sold 8,000 of the March 4 weekly 46.5 calls at .63.? Net, the customer paid .09 to be long the 45s and short 2 of the 46.5 calls.
The customer is thinking between now and March 4 expiration CBS is going to climb higher but will not explode higher.? The spread hits maximum profitability if CBS runs to 46.5 in the next couple of weeks.? If CBS explodes higher the trade can get beat badly.? IF the stock moves the other way the risk is limited.? This was an opening trade based on OI.
This trade is bullish CBS and bearish CBS volatility.