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Put sales telegraph Monster rally

Monster Worldwide rallied hard yesterday, and it all began with some innocent put selling.

The online employment agency entered the session with a 30 percent loss in the preceding month. Activity started late in the morning, when our tracking systems started to detect activity in the puts as investors wrote protection in hope MWW would hold its ground or push higher.

The December 10s were the first to stand out out. More than 2,100 changed hands, mostly at the asking prices of $1.65 to $1.80, which indicates that they were sold. Volume was more than 40 times open interest in the strike.

Selling also occurred in the December 9s for $1.15 to $1.20 and the December 8s for $0.65 to $0.75. The stock started rallying almost immediately, and ended the session with a 21 percent gain at $9.91

It wasn't until the final hour that call buyers got involved, ultimately snapping up more than 2,800 October 8 contracts for $1.90 to $2.20. See our Education Section for more on put selling.

The rally appears to have been triggered by news that members of management recently bought more than 85,000 shares in the company. A large amount of short interest in the stock probably added to upside.

MWW's last earnings report on July 28 beat expectations on the top and bottom lines. It got hammered along with most other stocks in the early-August selloff, which brought the shares back to their lowest level since March 2009.

Overall options volume in the name was 18 times greater than average in the session.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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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.

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