Bears tighten grip on NYSE Euronext

By David Russell,

Shutterstock photo

NYSE Euronext has been trending lower, and the bears are tightening their grip.

optionMONSTER's Depth Charge monitoring program detected the purchase of about 8,300 September 18 puts for $0.29 and the sale of an equal number of September 23 calls for $2.12. Volume was more than 6 times open interest at both strikes.

Some 5,000 June 28 calls were bought around the same time for $0.03 against previous positioning, which indicates that an existing short position was closed and rolled forward by three months.

NYX rose 0.33 percent to $24.33 on Friday and has lost 18 percent of its value in the last three months. The operator of financial exchanges has been falling amid weak trading volumes and after failing to merge with Germany's Deutsche Bourse.

Two aspects of the option activity were especially bearish. First, the trader significantly increased the number of contracts in the bet against the stock. Secondly, the investor rolled the short calls down from $28 to $23, which lowered by $5 the level at which he or she is willing to sell stock.

The fact that the new strike price is less than Friday's close reflects a belief there is no hope of a rally. (See our Education section)

Overall option volume was 13 times greater than average in the session, according to the Depth Charge.

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
Referenced Stocks: NYX

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