Genco Shipping exploded higher yesterday, but buyers are
optionMONSTER's Depth Charge tracking system detected the purchase
of about 2,200 March 8 puts for $0.70 and $0.75. Volume was more
than 4 times open interest in the strike.
GNK rose 14 percent to $9.02 yesterday. The debt-laden shipping
stock began dropping in late-2009 and hit an all-time low below $5
last August, but it has been recovering since then and started to
accelerate recently. The stock just broke through its 200-day
moving average and is up 25 percent in the last week.
The puts were probably bought by investors who are also buying
shares but want
against a potential reversal. The activity was similar to option
flow the previous session in
. Both companies are attempting to rebound from long-term
downtrends. (See our
section for more on protective strategies.)
Overall option volume in GNK was 4 times greater than average in
Other shipping companies including DryShips and Eagle Bulk Shipping
have also been climbing off all-time lows recently, and value
investors may consider the industry attractive on a bet that the
global economy is poised for recovery.
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