One investor is throwing in the towel on ARM Holdings as the
chip maker staggers at an old resistance level.
optionMONSTER's Depth Charge monitoring program detected the
purchase of 3,000 October 27 puts for $0.35 to $0.40 and the sale
of an equal number of October 28 calls for $0.75 to $0.80. Volume
was more than triple the open interest in each strike, indicating
The investor probably owns shares and is using the options as a
. He or she is now
on the hook
to sell the stock for $28 if it's above that level on expiration
and has a
to sell them for $27 if they go below that price. Including the
$0.40 credit earned, however, their maximum price would be $28.40
and their minimum price $27.40. (See our
ARMH fell 0.21 percent to $27.92 yesterday. Known for its strong
with Apple, the British company went on a massive run between early
2009 and 2011, appreciating roughly tenfold in just 24 months. It's
been consolidating since then, mostly trading on either side of
The stock fell into the low $20s in the spring as the broader
market declined but has rebounded along with the S&P 500 since
the summer. Given that it's now back around that same $28 area,
some chart watchers could think further upside will be limited,
which appears to be the thinking behind yesterday's
The trade pushed total option volume to 5 times greater than
average in the session, according to the Depth Charge.
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