The bears are hoping T. Rowe Price disappoints when it reports
earnings later this month.
optionMONSTER's Depth Charge monitoring system detected the
purchase of 1,700 November 75 puts for $2.35 and the sale of an
equal number of October 75 puts for $1.20. Volume was below open
interest in the shorter-dated contracts, which indicates that an
existing position was closed and rolled forward in time.
Puts lock in the price where shares can be sold on the mutual-fund
operator. Investors use them to
protect long positions
against a decline or to speculate on a drop. Today's traders are
probably outright bears because they're using in-the-money
contracts. (See our
TROW is down 0.9 percent to $73.99 in morning trading and has
fluctuated between $70 and $80 since February. The company, which
gapped lower after a weak earnings report in July, is scheduled to
release its next quarterly report on Oct 24.
That's after the October contracts expire, so adjusting the
position in time will let the trader profit from bearish report.
Total option volume is 10 times greater than average so far in the
session, according to the Depth Charge. Puts outnumber calls by
more than 800 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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