Sellers hit Liberty Interactive near highs

By David Russell,

Shutterstock photo

Liberty Interactive is teetering near multi-year highs, and investors are hitting the sell button.

optionMONSTER's Depth Charge tracking program detected the purchase of 3,000 May 15 puts for $0.10 and the sale of an equal number of May 18 calls for $0.85. Volume was above open interest in both contracts.

The transaction was probably the work of an investor who owns shares in the media company, which is the parent of the QVC retail channel. He or she collected a credit of $0.75, ensuring a minimum sale price of $15.75 and a maximum of $18.75.

Known as a collar , the trade is a common hedging strategy. (See our Education section)

LINTA rose 1.62 percent to $18.81 yesterday. It's up 21 percent in the last six months but recently stalled around the same level where it found support in November 2007. That could be leading some chart watchers to believe that resistance is in place.

Overall option volume in the company was 6 times greater than average yesterday.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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

This article appears in: Investing Options
Referenced Stocks: LINTA

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