The bears are trying to attack Lions Gate Entertainment with the
shares near all-time highs.
optionMONSTER's Depth Charge monitoring program detected the
purchase of some 17,000 June 23 puts for $1.04 to $1.20 in volume
that dwarfed the strike's previous open interest of just 518
contracts. Premiums increased as the stock rose, illustrating a
strong buying pattern.
Puts normally move in the opposite direction as the shares because
against lower prices. Traders buy them to hedge a move to the
downside or to speculate on a drop. They can be safer than simple
short selling because there is no upside risk. (See our
section for more)
LGF is up 1.31 percent to $24.02 in late-morning trading and has
broken out to new all-time highs. The studio's shares rallied some
50 percent in the first quarter and have been consolidating since.
Its last two earnings reports have beaten expectations.
Today's bearish activity hit earlier in the session with the stock
near the top of the recent range, so the trader apparently sees
resistance on LGF's chart.
Total option volume is 9 times greater than average in the name so
far today, with puts outnumbering calls by a bearish 16-to-1 ratio.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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