Option Traders Playing a Merger of Brazil Banks Page 2
Carter's currently trades on the S&P Smallcap 600 Index. Implied volatility on all its options shows a 6-percentage-point elevation above the historic reading on the stock.
Finally, heavy downside put activity in Gannett (GCI - commentary - Cramer's Take), the newspaper enterprise that owns the daily national newspaper USA Today, sent overall option activity to 9 times the normal level. The opening activity we saw in December $5.00 puts on volume of 25,000 lots traded to the middle of the market, making a directional call tough to pin down.
The activity did not appear tied to a stock transaction. Still, if bought by a trader, it may have been done to protect an existing long stock position, taking advantage of a 45% discount in the price of these puts to lock in downside insurance. Or the trader may have opted to sell those puts for the 30-cent credit.
P.S. Will you be there when Cramer makes his next move?
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At the time of publication, Darst had no positions in the stocks mentioned.
Rebecca Engmann Darst is the Portfolio Manager for TheStreet.com?s Options Alerts Portfolio newsletter and an equity options analyst for RealMoney Each Thursday at 6:30 a.m. EST, she delivers the early-morning lowdown on option volume and sector trends on CNBC's "Squawk Box."
Prior to her work in the equity options market, she spent seven years in Scandinavia as a Copenhagen-based chief reporter for a European Commission news service, correspondent for Spanish daily El Mundo and Radio Netherlands, followed by stints at Nordea Bank and Saxo Bank.
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