One investor is ringing the register in News Corp. with the
media stock back at a long-term high.
optionMONSTER's Depth Charge monitoring program yesterday detected
the purchase of 5,952 April 20 puts for $0.30 and the sale of an
equal number of April 24 calls for $1.60. Volume was more than 25
times open interest at both strikes.
He or she probably owns shares and has agreed to sell them for $24
if they're above that level on expiration. Including the $1.30
credit earned, the exit price would be $25.30--roughly the same
area where shares peaked in April 2007.
NWSA slipped 0.1 percent to $24.50 yesterday. The stock is up 37
percent so far this year amid strong earnings as investors flock to
the media space. Traders have also targeted the name after
management said it would split its publishing and entertainment
businesses into two new companies.
Yesterday's option trade gives the investor the right to sell
shares for $20 if they go below that level, or $21.30 including the
credit received on Tuesday. If the stock closes between $20 and $24
on expiration, both the calls and puts will expire worthless in
this strategy, known as a
. (See our
The trade pushed overall option volume to almost triple the daily
average in the session, according to the Depth Charge.
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