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Why one trader is selling puts in SAP

SAP is trying to bounce, and one trader is betting that its shares have found a floor.

optionMONSTER's tracking systems detected the sale of about 3,200 December 50 puts, first for $3.90 and then the largest block for $3.80. Volume was 7 times open interest in the strike.

SAP is up 2.17 percent to $51.38 in early afternoon trading and is attempting to find support at its January lows. The German software giant has fallen 14 percent in the last three months.

Today's put sale reflects a belief that shares will remain above $50 through expiration. Investors often sell puts on stocks they like but don't want to spend money buying shares. (See our Education section)

SAP's last earnings report on July 26 beat expectations on the top and bottom lines. The next release comes out on Oct. 27.

Overall option volume in the stock is more than 4 times greater than average so far 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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


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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