One investor is praying that VimpelCom will rebound.
optionMONSTER's tracking systems detected the sale of 2,500 March 15 puts on the emerging-market telecom, which operates across Asia and Africa, for $5.47. An equal number of December 15 puts was bought at the same time for $5.46, but volume was below open interest in that strike, which suggests that an existing short position was rolled from one month to the other.
VIP is down 2.26 percent to $9.53 today and has lost 14 percent of its value in the last week amid waning enthusiasm toward international stocks and risky assets.
It appears that today's option trader had sold the December puts long ago when VIP was at a much higher level. He or she apparently thought that it would stay above $15 and expected that the puts would expire worthless.
But now that the stock has crashed, the trader would be forced to buy shares for $15 at expiration this Friday. So rolling the position forward allows an additional three months for VIP to rebound. But it also keeps them in the position longer and leaves them exposed to further downside if the stock continues to fall.
Overall option volume is 6 times greater than average so far today.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.