Two big emerging-market telecom stocks have been drifting lower
for months, but investors apparently think that they're done
optionMONSTER's tracking systems detected heavy put selling in
Mobile TeleSystems and VimpelCom, which both operate across Russia
and central Asia. In MBT, they wrote more than 8,000 September 19
contracts, mostly for $1.40, and VIP saw the sale of 10,000
September 12.50s for $0.75.
MBT closed the session up 1.49 percent to $21.05, while VIP rose
2.05 percent to $13.94.
Traders often sell puts on stocks they like but don't want to spend
cash buying. The strategy lets them collect income in exchange for
insuring other investors against losses. (See our Education
Both companies are interesting because they operate in giant
territories with major growth potential, and quarterly revenue
expanded at more than 20 percent in each. VIP has a price/earnings
growth ratio of 0.31 times while MBT's is 0.91 times--extremely low
numbers for telecom stocks.
We have seen sporadic call buying in MBT, but only recently has the
stock shown signs of breaking free of its funk.
Total option volume was nine times the average amount in the name
and six times above normal in VIP.
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