What's behind put selling in Sanmina

By David Russell,

Shutterstock photo

Sanmina-SCI exploded higher yesterday on a strong earnings report, and investors apparently think that there's no going back.

optionMONSTER's tracking systems detected the sale of about 4,600 August 11 puts in Sanmina, which assembles a broad array of electronics such as computers and circuit boards for other companies. Premiums declined from $0.65 to $0.35, driven lower by the shares rising and the strong selling pressure.

SANM ended the session up 21 percent to $11.19 after earnings and revenue exceeded forecasts. The rally came two sessions after rival Flextronics surged on a strong report of its own.

Selling puts reflects a belief that SANM will hold its ground or push higher into expiration. It also stands to benefit from the accelerating pace of time decay that will occur in the next three weeks. (See our Education section)

Overall option volume in the stock was 35 times greater than average in yesterday's 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
Referenced Stocks: SANM

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