Annaly Capital Management Inc. (NYSE: NLY )
are trading up near their 52-week high despite a
worse-than-expected earnings announcement, and one investor appears
to have closed a moderately bullish put position. The October
15-strike and 16-strike puts were active during morning trading
without any notable news on the company.
By 10 a.m. EDT, 7,500 October 15-16 put spreads had hit the
tape. Current open interest in the lower-strike puts is 24,000
while the higher-strike puts are home to current open interest of
17,900 contracts. The 15-strike puts traded for 18 cents per
contract, which was closer to the bid price at the time of the
trade. The 16-strike puts crossed the tape for 38 cents per
contract, which was closer to the ask price when the volume
This options action suggests the investor paid a net debit of 20
cents per spread to close out a bull put spread position. Depending
on the initial premium of the spread, the investor could have taken
a slight loss or gain by exiting the position. Judging from the
stock price, the investor most likely closed this put position to
take profits and might not be expecting the stock to climb much
higher during the near term.
NLY shares were trading around $17.50 as of 10:25 a.m. EDT. The
stock is trading 23% higher than its 52-week low of $14.05. On July
28, NLY announced earnings of 59 cents a share and missed estimates
by three cents.