One investor thinks that Adobe Systems is on solid ground.
optionMONSTER's monitoring programs detected the sale of 5,000 December 28 puts for $1.11 and the purchase of an equal number of December 26 puts for $0.41. Volume was below open interest in the 26s but not the 28s, which suggests that an investor had previously sold the 26s and is rolling the position to the higher strike.
The investor would have earned an initial credit from selling the 26s and is now generating an additional $0.70 of income. In return, the trader raised by $2 the level at which he or she is willing to insure other investors who own shares in the software company.
ADBE, which fell 1.72 percent to $27.38 yesterday, had been working its way higher since October. Shares fell hard early last month after management said it would stop developing its Flash player for mobile devices--a move that involved restructuring and represented a defeat in its challenge to Apple.
Since then, however, it has bounced around the same level that was the top of its range in September, which could be leading some chart watchers to think that it will work its way higher. ADBE also gapped higher on Sept. 21 after it issued a strong earnings outlook. (See researchLA B for more)
Overall option volume was 4 times greater than average on Thursday, with puts accounting for more than three-quarters of the activity
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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