Moody's has been strong, but investors are nervous as earnings
optionMONSTER's Depth Charge tracking system detected the purchase
of 1,950 May 40 puts for $0.96 and the sale of an equal number of
May 37 puts for 0.38. Volume was more than 4 times open interest at
cost $0.58 to open and will earn a maximum profit of 417 percent if
the stock closes at or below $37 on expiration. (See our
section for more on how options can be used to generate leverage
and hedge risk.)
MCO rose 2.65 percent to $41.85 yesterday and is up 24 percent so
far this year. The stock recently touched its highest level since
September 2008 and is attempting to hold support around its peak
Despite being shamed by the subprime-mortgage crisis, the company
is now flourishing. It's been focusing on new analytical services
apart from debt securities and recently announced that it would
charge more for credit ratings as new regulations inflate costs.
Guidance was better than expected the last time it reported
earnings in February. The next release is scheduled for the morning
of April 26.
Overall option volume in MCO was 8 times greater than average
yesterday, with puts accounting for more than 85 percent of the
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