Frontline is attempting to rise from nine-year lows, but one investor is still nervous about a drop.
optionMONSTER's Depth Charge tracking system detected the purchase of about 5,000 February 6 puts for $0.84 to $0.90. Most of the trades occurred at the same time that about 3,400 February 10 puts were sold for $3.19 to $3.24, but volume was below open interest in the strike.
That suggests that an existing protective position was rolled from the 10s to the 6s, letting the investor take some profits while remaining positioned for further downside. The trader may have also increased the number of contracts owned, or the additional buying lower strike may have been the work of a second investor.
FRO, which owns oil tankers and bulk-cargo ships, has gotten destroyed lately as investors worried about the global economy. Already lagging the market coming off the 2009 lows, it's down 69 percent so far this year and on Monday touched its lowest price since December 2002.
Today it's rebounding, up 4.07 percent to $7.93 early afternoon trading. Overall option volume in the stock is more than twice its daily average so far today, with puts outnumbering calls by 21 to 1.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
