Bullish Risk-Reversal Trades on China Mobile (CHL)

Shares of China Mobile (CHL) are trading lower on the session by 0.01%, at $54.25. The stock has been consolidating above the 200-day moving average for the past two months following a massive gap lower in mid-August.

With shares sitting on the $54.00 support/resistance level, one trader is initiating a bullish risk reversal today. A short while ago, the December $50.00 put was sold 2,000 times, near the bid, for $0.43 just as 2,000 December $57.50 calls were purchased, on the offer, for $0.60.

Volume did not exceed open interest here, therefore we will have to wait for OI data to reset tomorrow before knowing whether this was new positioning or closing.

The trade has pushed overall options volume to 2x normal volume.

30-day implied volatility is off 2.4% today to 18.05%. 10-day historical vol remains muted at just 9.66%.

China Mobile Limited is an investment holding company. The company and its subsidiaries provide mobile telecommunications and related services in 31 provinces, autonomous regions and directly-administered municipalities in Mainland China and Hong Kong.

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.