Weak numbers from China yesterday brought out the bears in
casino operator Melco Crown Entertainment.
optionMONSTER's Depth Charge monitoring program detected the
purchase of some 9,600 Weekly 23 puts expiring next Friday, May 31,
for $0.35. A similar number of May 24 calls were sold around the
same time for about $0.28. There was no open interest at either
strike, indicating that new positions were initiated.
Known as a
, the trade cost about $0.07 and establishes a $23 minimum-selling
price for the stock. The investor is also obligated to sell shares
for $24 if they close above that level on expiration, so they're
probably using it to protect a long position in the name. (See our
MPEL dropped 4.71 percent to $23.26 yesterday after the HSBC
purchasing managers index showed contraction in China's
manufacturing sector for the first time in seven months. Investors
likely have profits to hedge, as the Macau-based company had more
than doubled since last summer.
Total option volume was 7 times greater than average in the
session, according to the Depth Charge.
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