Bears taking aim at T. Rowe Price


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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 Education section)

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 Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

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