Floor seen in Mobile Telesystems

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Someone apparently thinks that the selloff in Mobile Telesystems has been overdone.

optionMONSTER's tracking systems detected the sale of 7,000 September 14 puts in the Russian telecom for an average premium of $0.425. There was no open interest at the strike before the trade appeared, which indicates that a new position was initiated.

The investor will keep that credit as profit if MBT stays above $14 through mid-September and the puts expire worthless. But if it falls below that strike price, he or she will be on the hook to buy shares at that level. (See our Education section for more on this short-put strategy , which makes money from the passage of time rather than a directional move.)

MBT rose 1.52 percent to $18.08 on Friday but is down 20 percent in the last three months. Most of that drop followed a selloff in emerging markets, sending the stock to a 14-month low of $16.77 on Jan. 31.

The plunge also drove up MBT's implied volatility , which boosted the value of the puts and made them more attractive to sell. Friday's trader can also endure a drop of 20 percent and still make money.

Total option volume was 90 times greater than average in the session.



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: MBT

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