Goldman Sachs has been bleeding lower, and one investor is
hoping the tide will turn.
optionMONSTER's monitoring systems detected the purchase of about
19,000 May 110 puts for approximately $10 and sold a matching
number of June 110 puts for roughly $11. Volume was below open
interest in May but not in June, which indicates that an existing
short position was closed and rolled forward by one month.
The investor had probably sold the May contracts when GS was
trading higher, looking for the brokerage stock to hold its ground.
But then it pushed lower and now those puts are in the money, which
places them at risk of being forced to buy shares for $110.
Today's trade delays that risk by another month and allows them to
collect $1 of premium as they wait. Their position now is similar
to being long because short puts will profit from a rally in the
share price. (See our
GS is off 1.54 percent to $100.56 in early afternoon trading and
down 13 percent in the last month. The brokerage and
investment-banking stock rallied along with other financials early
in the year but has struggled more recently amid worries about
Europe and as a deleveraging economy dries up business
Today's put roll pushed total options volume in the name to triple
the daily average.
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