Trader is playing for time in TripAdvisor

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One investor wants to turn time into money with TripAdvisor.

optionMONSTER's tracking systems detected the sale of about 3,600 March 30 puts for $0.25. Volume was almost triple the open interest in the strike.

The trader is now obligated to buy shares of the travel-information service for $31 if they fall to that level over the next 1-1/2 weeks. If they don't, the puts will expire worthless and he or she will keep the credit.

Selling puts is a common strategy when investors like a stock but don't want to spend money to get long. It mainly profits from time decay , the process by which options lose money at an accelerating pace as they near the end of their lifecycle. (See our Education section)

TRIP fell 1.11 percent to $31.07 yesterday and has fluctuated between $26 and $36 since getting spun off from Expedia in December.

Overall option volume in the name was twice the daily average in the session.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: TRIP

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As of 4/24/2014, 12:45 PM