One trader apparently thinks that Toyota is on solid ground.
optionMONSTER's tracking systems detected the sale of about 1,700
May 80 puts for $1.31 and the purchase of a matching number of May
77.50 puts for $0.82. At the same time, about 1,700 April 82.50
puts were bought for $0.53 and 1,700 April 80 puts were sold for
Volume was below open interest in the April puts but not in the May
conracts, indicating that a position was rolled from one month to
the next. The April options were closed at a cost of $0.49 and the
opening trade in May generated a credit of $0.49, resulting in no
The point of the transaction is that the investor lowered by $2.50
the level at which he or she must buy shares in the Japanese auto
maker. The trader probably opened the position sometime earlier,
hoping that it would hold its ground. The stock has probably fallen
more than anticipated, and the investor now wants more time for the
trade to play out.
TM is up 1.18 percent to $82.51 today and 25 percent this year. It
has mostly followed movements in the Nikkei and the yen.
Today's option strategy is known as a
put credit spread
, which makes money from the passage of time rather than a
directional move. (See our
More than 7,200 contracts have traded so far in the session, which
is more than 6 times the normal daily volume.
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