Phoenix New Media has been falling, but one investor apparently
believes that the Chinese Internet stock is at an attractive level.
optionMONSTER's tracking programs detected the sale of 5,700
October 7.50 puts for $0.70. Volume was more than 380 times the
previous open interest at the strike, which indicates that new
positions were initiated.
lets investors earn income in return for agreeing to buy shares if
they fall below the strike price, which in this case is $7.50. The
strategy reflects a favorable opinion about the company and has
similar downside risk to owning shares. (See our
FENG declined $3.85 percent to $10.23 on Friday. It peaked around
$13.40 a month ago but has been skidding lower as sentiment turns
against Chinese Internet stocks. Our
analysis tool shows that other names in the space have been weak
recently as well, including Baidu, Sina, and China DangDang.
The put seller may like FENG because of its strong growth
trajectory, with earnings up 200 percent in the last year, and its
track record of beating analyst estimates. The $7.50 strike price
is noteworthy because that level was the stock's peak from 2012 and
could now serve as support.
Total option volume was 34 times greater than average in the
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