Cautious positions taken in Finisar


Shutterstock photo

Finisar has made a nice move, and investors have protection in place.

optionMONSTER's Depth Charge tracking program detected heavy put activity in the optical-networking company, which reported strong earnings and revenue on Sept. 1. Shares jumped on that news have been grinding sideways since then as they attempt to build support above the 100-day moving average.

In the first big trade today, a block of 6,000 December 19 puts were bought for $1.50 and 9,000 November 17 puts were sold for $0.15. Volume was below open interest in November but not December, which suggests that an existing protective position was rolled forward by one month and up by $2. The investor also reduced the number of contracts.

Less than an hour later, an investor sold 3,000 November 24 calls for $0.25 and bought 4,000 November 19 puts for $0.50. That trade appears to be a modified version of a collar , a common strategy for protecting a long position in a stock. (See our Education section)

FNSR is down 2.2 percent to $21.32 in late morning trading. It had traded around $40 earlier in the year before collapsing on a bad earnings report in March. (See our new researchLAB service)

Overall option volume in the name is more than 5 times greater than average so far today.

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

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by