Bears want to knock down Southwest

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Southwest Airlines has struggled, and one bear wants to knock it down a peg.

optionMONSTER's Depth Charge monitoring system detected the purchase of about 2,000 September 11 puts for $1.80 to $1.90. Volume is more than quadruple open interest in the strike.

LUV is down 0.33 percent at $9.19 today, so those puts are in the money . They will closely track declines in c

In-the-money puts are expensive and will lose money quickly if the stock rallies. This suggests that the trade is the work of a speculative bear looking for LUV to fall, rather than a shareholder hedging a long position. (See our Education section for more on how to place downside bets with less risk than short selling.)

Overall option volume is twice the daily average, with puts outnumbering calls by 7 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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