Activision Blizzard faces put buying

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The sentiment has turned cautious in Activision Blizzard, less than a week after big-money bulls piled into the video-game developer.

optionMONSTER's Depth Charge monitoring system detected the purchase of 5,000 December 15 puts for $0.07 to $0.10. Volume was more than 40 times the previous open interest at the strike, indicating that new positions were initiated.

These puts lock in the price where a stock can be sold, letting investors hedge against a pullback or speculate to the downside. But these contracts will expire worthless if shares remain above $15 through mid-December. (See our Education section)

ATVI is up 1.07 percent to $17.07 in morning trading. The game company gapped higher in late July after buying back shares from Vivendi at a discount but has been consolidating in a range ever since. There was also heavy short-term call buying last Thursday, Nov. 14, as investors looked for a run higher through next week.

More than 8,800 contracts have traded in the stock so far today, more than twice the daily average. Puts accounted for a bearish 90 percent of the total.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: ATVI

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