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.
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.
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