Traders are calling a bottom in Career Education as the shares
attempt to hold long-term lows.
optionMONSTER's market scanners detected the sale of more than
3,200 September 3 puts in the education stock for $0.40. Volume
was more than 24 times previous open interest at the strike.
Writing puts obligates the investor to buy shares at the strike
price, while letting him or her collect premium in the meantime.
The unusual thing about today's transaction is that they selected
an in-the-money strike, which will cause the position to behave
similarly to owning the stock on a move up to $3. See our
CECO declined 3.61 percent to $2.67 in morning trading, and
has lost 23 percent of its value in the last month. It's been
falling since 2010 after the Obama Administration cracked down on
student-lending practices, and has recently been downsizing its
operations while seeking growth opportunities overseas.
The company trades for just one-third of book value and has a
smaller market capitalization than its cash reserves. It also has
no debt, which could make some value investors think it's
attractive regardless of its business. Shares have also been
trying to form a long-term inverse head and shoulders reversal
pattern since late last year.
Total option volume is 16 times greater than average so far in
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