St. Joe has been prime feeding ground for the bears this year, and they're coming back for seconds.
The Florida land developer has been dropping since early February, when it double topped at $30. It gradually slid lower into the spring and fell every session but two last during the month of May. JOE fell another 1.14 percent to $20.76 in afternoon trading today.
Our Depth Charge tracking system is showing bearish activity today as one trader looks for the declines to continue into late 2011. A block of 2,500 June 29 puts was sold for $8.15, along with about more than 2,300 June 30 puts for about $9.15.
Roughly matching numbers of December 29 puts and December 30 puts were bought at the same time for about $10.50 and $11.45. Volume was below open interest in June but not in December, which indicates that existing long positions were rolled from one month to other.
The trade was unusual because the investor kept the same strike prices, even though they are deeply in the money. Normally, they move closer to the money to take profits and to achieve better pricing on the options. Regardless, the activity remains highly bearish.
JOE has been losing money for years as it writes down the value of its real estate and short interest stands at a hefty 83 percent of the float. Nonetheless, the company doesn't seem to have a significant debt load, which could prevent it from entering the kind of death-spiral that short sellers hope for.
Overall options volume in the name is 8 times greater than average so far today, with puts outnumbering calls by 20 to 1.
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