One investor apparently thinks that KLA Tencor is on solid ground.
optionMONSTER's monitoring systems detected the sale of about 3,000 January 47 puts for $2.65 and $2.70 against open interest of 2,218 contracts.
KLAC is up 1 percent to $46.42 in morning trading. The chip-equipment stock is up 18 percent in the last three months and trying to follow its 50-day moving average higher.
Today's puts are in the money, which creates an interesting set of outcomes for the investor. He or she will make money even if KLAC pushes lower in the next five weeks as long as it stays above $44.35. That element of the trade benefits from the accelerating pace of time decay as expiration approaches.
They also have upside exposure because the puts are negatively correlated to the share price: A rally in KLAC above $47 will erase the value of the short puts , letting them keep the premium. (See our Education section)
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