Freescale Semiconductor is sitting at all-time highs, and
someone is apparently afraid that it's going to roll over.
optionMONSTER's Depth Charge monitoring program has detected the
purchase of about 7,600 May 24 puts, most of which priced for
$1.30. Volume was more than 300 times previous open interest at the
strike, which indicates that new positions were initiated.
Puts lock in the price where a stock can be sold, letting investors
bet on a drop or
hedge a long position
. That way they can stay get short or stay long with limited risk.
FSL is down 1.51 percent to $24.30 in afternoon trading but is up
52 percent so far this year. The chip maker exploded higher on a
strong earnings report in late January and kept advancing until it
hit $26 last week.
The stock made a lower high yesterday as the rest of the market
came under heavy selling pressure, which could make some chart
watchers fear that a bigger drop is coming next. The company's next
earnings report is scheduled for April 24 after the closing bell.
Overall option volume is 14 times greater than average in FSL so
far today, according to the Depth Charge, with puts accounting for
a bearish 93 percent of the total.
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