America Movil (AMX) put action suggests moderate bearishness

By Karla Yeh,

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America Movil S.A.B (NYSE: AMX ) shares are on the rise during morning trading without any company-specific news on the wires, but options action out of the gate suggests at least one investor is willing to commit a hefty amount to call for near-term downside.

At 9:54 a.m. EST, a block of 5,000 August 49 puts changed hands versus current open interest of 1,400 contracts and a block of 7,500 August 45 puts crossed the tape versus current open interest of 1,200 contracts. The lower-strike puts changed hands for 65 cents per contract, which was the bid price at the time of the trade, while the higher-strike puts traded for $1.87 per contract, which was closer to the ask price when the volume hit the tape. In this ratio bear put spread, the investor paid a total of $935,000 for the 49-strike puts and collected a total of $487,500 for the 45-strike puts to pay a total debit of $447,500 for the spread. It looks like this investor is willing to limit risk on a bet that AMX shares will be trading below $45 at August options expiration in 43 days. If AMX shares are still trading higher than $49 at expiration, the investor loses the entire premium paid. It is possible that this ratio put spread buyer tied this options action to a stock position, which would transform the directional bet into a volatility play, but this article focuses only on the put volume on the tape.

AMX has not announced its next earnings release date, but the market expects the Mexico-based wireless communications company's report around July 20. Shares of the company gained 12 cents to $49.78 during morning trading.

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

This article appears in: Investing Options
Referenced Stocks: AMX

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