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What put action means in Focus Media

Posted
9/19/2011 12:43:00 PM
By: optionMONSTER
Referenced Stocks:FMCN

Focus Media is trying to rebound, and one investor is keeping it on a tight leash.

optionMONSTER's Depth Charge tracking system detected the purchase of about 3,000 October 30 puts for $1.47 to $1.49. A matching number of October 26 puts were sold at the same time for $0.42 against open interest, which indicates that an existing position was rolled to the higher strike.

The trade cost about $1.06. It raises by $4 the level at which the investor is protected on his or her position in the Hong Kong-based advertising company, which operates thousands of video screens in buildings across mainland China.

FMCN is down 0.76 percent to $31.48 and has been consolidating after a big rally in the first five months of 2011. It's been making higher lows since June and following its 200-day moving average higher, which some chart watchers may consider evidence it remains in a bullish uptrend.

The last earnings report on Aug. 22 was bullish, with revenue growing 46 percent and management forecasting continued strength.

Overall option volume in FMCN is 4 times greater than average so far today, with puts outnumbering calls by 12 to 1, according to the Depth Charge.