One investor is apparently using options to time an exit from
Our Depth Charge monitoring system detected the purchase of 16,000
September 5 puts for $0.13 and the sale of an equal number of
September 7 calls for $0.80, resulting in a net credit of $0.67.
This was probably the work of an investor who owns shares in the
obligates the trader to sell KEY for $7 if it remains above that
level through expiration.
Including the credit, the exit price would be $7.67. The position
loses value below $7, down to $5.67--roughly the same level where
the stock bounced in September. (See our
Based on the expiration date, it appears that the investor bought
shares near the low last summer and is now using the options to fix
the exit price. Delaying the sale can also result in a lower tax
KEY fell 2.37 percent to $7.43 yesterday and has lost almost 8
percent of its value in the last month.
Overall option volume was 13 times greater than average in the
session, according to the Depth Charge.
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