Fortinet fell hard last quarter, and the bears came back
optionMONSTER's Depth Charge tracking system detected unusual
activity in the January 20 puts shortly after the open, with buyers
paying $0.25 to $0.30. More than 3,600 contracts traded by the end
of the session, far above the strike's previous open interest of
just 244 and therefore new positions.
Puts lock in the price where investors have the right to sell
stock, so the options can generate some nice leverage in the event
of a decline. That happened nicely yesterday because those puts
more than tripled in value to $1.20 as the network-security stock
pushed lower. (See our
FTNT fell 8.78 percent yesterday to close at $19.33. The stock
gapped lower on Oct. 16 after the company cut its guidance, then
rolled over after attempting to rebound in November and December.
Total option volume was 32 times greater than average in the name.
There was also heavy call volume, but most of those were sold,
which reflects a belief that upside will be limited.
(A version of this post appeared on
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