Take-Two Interactive Software is at key support, and one investor thinks the bottom is in.
optionMONSTER's tracking systems detected the sale of 7,500 September 10 puts for $0.15 against open interest of just 114 contracts. The only way the trade can lose money is if TTWO breaks through a double bottom established earlier this month and makes news 2010 lows.
TTWO rose 1.29 percent to $11.81 yesterday and has been trending lower since May, when it hit a 2-1/2 year high of $17.58. The last earnings report on Aug. 8 missed forecasts on the top and bottom lines amid weak demand for its videogames. Guidance was also below consensus.
The put seller apparently thinks the worst is now priced in and the worst of the selling is over now that the stock is back to a support level from mid-2010. If TTWO holds its ground, time decay will erase the value of the contracts, and he or she will keep the premium. See our Education Section for more on the strategy.
Overall options volume was 4 times greater than average in the name.
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