Bears target Penn National Gaming

By
A A A

Penn National Gaming has been trending lower, and now the bears are looking for another push to the downside.

optionMONSTER's scanning programs detected the purchase of more than 2,200 November 39 puts, most of which were priced at $0.41 and $0.42. The volume was 63 times the strike's open interest at the start of the day, so this is new money being put to work.

Owning puts locks in the price where the investor can sell shares in the little-known gaming company. If the stock tanks, those contracts will shoot up in value and generate significant leverage on a percentage basis. But if it doesn't fall, the long puts will expire worthless. (See our Education section)

PENN fell 1.12 percent to $39.85 on Friday. It had been grinding higher since late 2008 but declined between June and August--the same time that the broader market was rallying. It then proceeded to make a lower high below the same $44 level that was support in the spring. That kind of price action could make some chart watchers think that sellers are taking over.

More than 4,600 contracts traded in the session, 33 times greater than average, according to optionMONSTER data.

(A version of this post appeared on InsideOptions Pro on Friday.)



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.

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


This article appears in: Investing , Options

Referenced Stocks: PENN

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

Most Active by Volume

88,363,013
  • $102.47 ▲ 2.72%
76,664,591
  • $16.60 ▲ 2.09%
75,156,840
  • $13.20 ▼ 5.71%
53,255,668
  • $40.68 ▼ 6.03%
49,564,657
  • $96.87 ▲ 2.63%
42,649,404
  • $9.26 ▲ 1.09%
37,436,329
  • $31.19 ▲ 5.05%
35,538,826
  • $28.28 ▲ 1.25%
As of 10/21/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com