Trader is worried Genco will keep sinking


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Genco Shipping & Trading has been falling for months, and one investor wants out.

optionMONSTER's Depth Charge monitoring program detected the purchase of 2,400 July 4 put for $0.45 and the sale of an equal number of July 4 calls for about $0.71. Volume was more than quadruple open interest at both strikes.

The transaction resulted in a credit of $0.26 and is tantamount to selling the stock for $4.26. The trader will be forced to exit the position if GNK remains above $4 through expiration but below that level will make money on the puts. (See our Education section for more on the strategy, which is similar to a collar trade.)

GNK rose 0.47 percent to $4.30 on Friday and is trying to hold above a previous all-time low established last August. It had traded for more than $80 before the market crashed in 2008.

Overall option volume in the stock was more than 3 times greater than 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 Nasdaq, Inc.

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This article appears in: Investing , Options

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