SunEdison has pulled back, and someone is apparently afraid that
it will keep falling.
optionMONSTER's Depth Charge tracking system detected the purchase
of 3,000 April 17.50 puts for $1.18 yesterday. Equal-sized blocks
were sold at the same time in the April 16 puts and the April 20
calls for $0.46 and $0.40 respectively. Volume was more than 6
times the previous open interest in each of the three strikes,
indicating that new positions were initiated.
The overall trade cost $0.32 and will protect against short-term
losses in the solar-energy stock, earning a profit of 369 percent
on a drop to $15 or lower. The strategy also obligates the investor
to sell shares above $20, so it's likely that he or she is using
the trade to protect a long position in the stock. (See our
section for more on the strategy, which combines a
SUNE fell 0.86 percent to $17.26 yesterday. The stock more than
doubled between early November and the start of last month, stalled
at its old peak from 2009, and has been skidding lower since. The
name also drew
bullish call buying
several times this year, with investors doubling and tripling their
money on more than one occasion.
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