TiVo reports after the bell, and one investor is protecting
against a drop.
optionMONSTER's Depth Charge monitoring system detected the
purchase of 7,000 September 8 puts for $0.60. Equal-sized blocks
were sold in the September 7 outs and the September 10 calls at
about the same time for $0.19 each. Volume was above open interest
in all three strikes.
The trade resulted in a net cost of $0.22 and will earn a maximum
profit of 355 percent if the digital-video stock closes at or below
$7 on expiration. It will also force the trader to sell stock if it
pops above $10, so it if wasn't the work of a shareholder, he or
she would face losses above that level.
TIVO fell 2.30 percent to $8.06 in afternoon trading and has been
trapped between $8 and $10 since May 2010. The company has been in
an unusual position for more than a year, with weak operating
results but a strong portfolio of intellectual property.
The stock saw bullish activity last week after an analyst report
identified Google as a potential buyer, and identified a fair value
roughly double its current price. Some traders doubled their value
in those options before shares falling once again.
Overall options volume in TIVO is triple the average amount so far
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