IAC/InterActive has been struggling, and one investor apparently
thinks that more downside is coming.
optionMONSTER's Depth Charge tracking program detected the purchase
of 1,500 February 45 puts for $2.05 and the sale of an equal number
of February 40 puts for $0.50. Volume was more than 9 times the
previous open interest at each strike, indicating new activity.
The trade cost $1.55 and will earn a maximum profit of 223 percent
if the e-commerce stock closes at or below $40 on expiration. (See
section for more on the strategy, known as a
bearish vertical spread
IACI is down 3.3 percent to $43.98 in morning trading. It touched
an all-time high of $55.57 in October but then gapped lower after
confusion surrounding its last quarterly report. Shares have been
consolidating below their 200-day moving average since, which could
be leading some chart watchers to expect further downside.
The company owns websites including Match.com and About.com. Its
its next earnings-release date hasn't been announced but will
probably occur early next month, based on last year's schedule.
Total option volume is 11 times greater than average in IACI so far
today, with puts outnumbering calls by 10 to 1.
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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