Buckeye Technologies is hovering after a big run, and one big
holder is apparently worried that it may head lower.
optionMONSTER's Depth Charge tracking system detected the purchase
of 1,500 June 25 puts for $1.25 and the sale of an equal number of
May 25 puts for $0.35. Volume was below open interest in May but
not in June, suggesting that an existing long position was rolled
from one contract to the other.
The transaction cost $0.90 and gives the investor an additional
month of downside protection in the producer of chemical cellulose,
which is used in a wide range of consumer products.
BKI rose 0.04 percent to $25.31 in morning trading. It surged to
new record levels in late January after a strong earnings report
but has been unable to continue higher since then. More positive
results came out on April 26.
Today's put action is probably the work of a shareholder who likes
the stock but is nervous that it may drop if the rest of the market
heads lower. Chemical and material-related names have been weak
recently despite reporting good earnings, which could indicate that
investors are done putting capital to work in those industries.
Overall option volume in BKI is 7 times greater than average so far
today, with puts outnumbering calls by 50 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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