Blackstone has been rallying, and one investor is paying to keep insurance up to date on an existing position.
optionMONSTER's tracking systems detected the purchase of 7,845 December 15 puts for $1.67 and the sale of an equal number of December 12 puts for $0.27. Volume was below open interest in the lower strike, but not the higher one, indicating position was rolled up from $12 to $15.
The strategy provides an additional $3 of downside protection for a net cost of $1.40. The investor is probably using the calls as to hedge a long position in the company, which runs private equity funds and provides non-bank financing.
BX rose 2.77 percent to $13.75 yesterday and is up 22 percent in the last month. It's been rising as investors price in higher asset prices, a better credit market, and stronger earnings.
The stock, an Advantage Point pick in August, is highly leveraged to the price of companies it owns and plans to take public. It also stands to benefit from hedge funds having made enough money since the 2008 market crash that they have now mostly paid back disgruntled investors under so-called high-water mark rules.
BX's next earnings report is scheduled for the premarket on Oct. 28.
The put roll pushed total options volume in the stock to 4 times greater than average.
(Chart courtesy of tradeMONSTER)
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