Put seller believes RealD levels will hold

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RealD snapped back after a drop earlier in the month, and one investor apparently thinks that it's on firm ground.

optionMONSTER's tracking systems detected the sale of 8,000 July 22.50 puts for $0.70 against open interest of just 600 contracts. The trade pushed total option volume in the thinly traded media tech company to 9 times greater than average.

RLD rose 1.29 percent to $24.41 yesterday. It briefly fell below $20 on June 10 after management said increased depreciation would hurt gross margin. It quickly rebounded and has been trading sideways since.

Despite the warning, earnings and revenue were better than expected. The company, which went public only 11 months ago, licenses three-dimensional viewing technologies for movies, television, and scientific applications.

Short interest ended May at a hefty 30 percent of the float, which could also support the share price.

The put sale reflects a belief that RLD will remain above $22.50 on expiration. If the trader is right, he or she will get to keep the credit. (See our Education section)




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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: RLD

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