TripAdvisor receives vote of confidence

By optionMONSTER,  August 15, 2012, 12:21:16 PM EDT

TripAdvisor had a weak quarterly report last month, but one trader isn't giving up hope.

optionMONSTER's tracking systems detected the sale of about 3,800 January 33 puts for $4 to $4.10. This is new activity, as there was no open interest in the strike before the trade appeared.

Selling puts let the investor collect income in return for agreeing to buy shares at the strike price. If it remains above that level, he or she will pocket the cash and the contracts will expire worthless. Even if it goes below $33, the premium earned lowers the effective entry price to about $29 if the trader is required to buy the shares. (See our Education section)

TRIP is up 1.81 percent to $33.76 near midday. The company, which provides travel reviews to consumers, was spun off from Expedia in December. It surged in May after earnings and revenue beat forecasts but then gapped lower on July 24 after its top line lagged estimates.

The stock is now back around the same level where it found support in late April, which could be leading some chart watchers to believe that further downside is unlikely.

There was also selling in the September 31 puts for $0.90 to $1 later 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.


This article appears in: Investing, Options

Referenced Stocks: TRIP



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