Ashland exploded higher last week, but now the paper is turning
optionMONSTER's Depth Charge monitoring program detected the
purchase of 4,000 April 85 puts against open interest of just 205
contracts. Premiums rose from $0.90 to $1 as the trades hit, which
shows the buying pressure.
Puts lock in the price where shares can be sold in the chemical
company, so they will gain in value if ASH drops through expiration
this Friday. Investors often use them to
hedge long positions
or to speculate on a drop. (See our
ASH is down 1.29 percent to $85.54 in morning trading but is up 15
percent so far this month. Most of that move occurred on Friday
after hedge fund Jana Partners disclosed it had amassed a 7.4
percent stake in the company and stated that its shares were
The stock has been sitting around the same level where it peaked in
January. The company reports earnings on April 24, after today's
contracts expire, so they're apparently worried about a simple
short-term pullback from this resistance level.
Total option volume is more than triple the daily average so far
today, with puts outnumbering calls by 83 to 1.
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