Referenced Stocks

More time sought in KKR strategy

By optionMONSTER,  June 20, 2012, 11:52:09 AM EDT

KKR Financial fell last month, and one investor wants more time for the shares to rebound.

optionMONSTER's monitoring systems detected the purchase of 4,000 July 9 puts for $0.75 and the sale of an equal number of January 9 puts for $1.20. Volume was below open interest in the July options but not the January contracts, indicating that an existing short position was closed and rolled forward in time.

The trader had probably sold the July contracts at an earlier date, looking for the San Francisco-based investment firm to hold its ground above $9. Now that KFN is below that level, he or she is adjusting the position to avoid being forced to buy shares at the strike price.

Today's roll also let them collect an additional $0.45 in credit, in return for sticking with the name for an additional six months. Their ideal situation would be for shares to push back above $9, rendering the puts worthless and letting them keep all the credits received. (See our Education section)

KFN is down 0.71 percent to $8.36 in morning trading. Total option volume is 11 times greater than average so far 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.


This article appears in: Investing, Options

Referenced Stocks: KFN



Latest News Video



Sign-in
Existing NASDAQ.com member? Log in here.

By signing into to the site using any of the third-party services above, you agree to NASDAQ.com's Terms of Use.

From Our Trusted News Source





Most Active by Volume:

Company Last Sale Change Net / %
BAC $ 13.43 0.07  0.52%
CSCO $ 24.24 0.35  1.48%
MSFT $ 34.87 0.79  2.32%
F $ 15.08 0.44  3.01%
ARUN $ 13.10 4.51  25.61%
SIRI $ 3.50 0.05  1.45%
GE $ 23.46 0.19  0.82%
S $ 7.32 0.04  0.55%