America Movil (AMX) put action suggests moderate bearishness


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 The NASDAQ OMX Group, Inc.

This article appears in: Investing , Options

Referenced Stocks: AMX

Karla Yeh

Karla Yeh

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