Cautious trade in AmerisourceBergen

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AmerisourceBergen has been staggering since a poor earnings report in April, and the options paper is cautious today.

optionMONSTER's Depth Charge monitoring system detected the purchase of more than 13,000 August 50 puts, most of which priced for $0.75 to $0.95. Volume was more than 80 times higher than the previous open interest at the strike, clearly showing that these are new positions.

These puts lock where shares can be sold in the pharmacy-benefits company, which gives them an inverse relationship to the stock price. Investors use them as insurance to protect long positions against drops and to place speculative downside bets. The shares are climbing today despite the downside option trades, which suggest that the activity was protective rather than outright bearish. (See our Education section)

ABC is up 2.21 percent to $54.90 in early afternoon trading. It rallied almost 50 percent between last summer and late April, only to fall sharply after quarterly earnings and revenue missed expectations.

Almost 19,000 contracts have changed hands so far today, more than 30 times greater than average. Puts account for 95 percent of the total.



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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: ABC

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