Zhongpin has been getting slaughtered along with most other Chinese industrials, and bears are looking for more downside.
optionMONSTER's Depth Charge tracking system detected heavy put buying in the food company, which processes pork, fruits, and vegetables. The June 12.50s were the busiest contract, trading almost 2,500 times against open interest of just 236. Premiums started at $0.25 but ratcheted up as the stock declined, fetching $1.25 late in the session.
HOGS ended Friday down 15 percent to $13.19, losing 35 percent of its value so far this year. The company reaffirmed guidance last month and reported a 40 percent surge in revenue, but net income rose just 27 percent because labor and transportation costs shot up.
Aside from Internet companies such as Baidu, most Chinese stocks have been struggling recently as investors anticipate that inflation will devour profits. HOGS appears to be following that trend.
Investors also bought about 1,200 July 10 puts for $0.20 to $1.04, with most of the large blocks pricing around $0.80.
Overall option volume in HOGS was 45 times greater than average in the session, with puts outnumbering calls by 2 to 1.
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