Groupon has been weak for a long time, but one investor is
finding value in the stock.
optionMONSTER's tracking programs detected the sale of 5,000 April
5.50 puts for $0.33 and the purchase of an equal number of April 5
puts for $0.15. Volume was below open interest at the lower strike,
so there are two possible explanations of the trade.
One is that the April 5 puts had been sold at an earlier date, and
the short position was rolled up to the April 5.50s. Alternately,
both positions may have been initiated, in which case the trade was
put credit spread
Either way, the investor collected a credit of $0.18 and is looking
for the stock to close at or above $5.50 on expiration. (See our
section for more on
strategies that make money from the
passage of time
instead of a directional move.)
GRPN is down 1.46 percent to $5.40 in morning trading and has lost
more than two-third of its value in the last year. The daily deals
service has repeatedly issued weak results and poor guidance during
that time. However, the stock has been holding its ground near $5
since September, which could be leading some traders to believe
that it's finding support.
Today's put spread dominates activity in the name, accounting for
more than 80 percent of total volume so far today.
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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