Trader is worried Genco will keep sinking

Comment

Shutterstock photo

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.

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



This article appears in: Investing , Options


More from optionMONSTER

Subscribe






optionMONSTER
Contributor:

optionMONSTER

Options
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com