InterPublic trade bets against pullback

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InterPublic has begun a long-awaited rally, and investors apparently think that there's no turning back for the advertising firm.

optionMONSTER's tracking programs detected the sale of 3,200 August 19 puts for $0.70. Volume was more than 300 times open interest at the strike, which indicates that a new position was initiated.

The put seller is now on the hook to buy shares in the advertising company for $19 through mid-August, no matter how low they may trade at the time. Including the premium received today, the effective entry price would be $18.30. If the stock remains above the strike, the puts will expire worthless while the trader books the credit as profit. (See our Education section)

IPG is down 0.21 percent to $19.31 in afternoon trading but is up 14 percent in the last three months. The stock was the target of repeated upside option activity starting in March as it pushed against long-term resistance from 2004. Shares then broke out on a strong earnings report and have been running since.

Overall option volume is slightly above average in the stock today, with the put sale accounting for more than half 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: IPG

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