TripAdvisor has been trending higher, and one investor wants a
piece of the action.
optionMONSTER's tracking systems detected the sale of almost 12,000
February 41 puts against open interest of just 32 contracts. Most
of them priced for $1.75 to $2.05.
is now obligated to buy shares of the travel-information company if
they close below $41 on expiration. Including the credit earned,
their entry price would be $38.95 to $39.25.
This trader probably likes the stock but doesn't want to expend
capital getting long. He or she now has the right to make some
money if the shares hold their ground and has essentially
programmed a purchase order at an 11 percent discount to the
current stock price if it does fall. (See our
Yesterday's trade also stands to benefit from the
natural process of time decay
, which will erase value of the puts sold short at an accelerating
pace as expiration approaches six weeks from now. Total option
volume was 14 times greater than average in the session.
TRIP fell 0.57 percent to $43.91 yesterday. The stock is up 45
percent since the beginning of November, fueled by a strong
earnings report and the news that Liberty Interactive had purchased
a controlling stake in the company.
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