Kodak Draws Bearish Options Trade

By Chris McKhann, analyst at OptionMonster

ROCHESTER, N.Y. (TheStreet) -- Eastman Kodak (EK Quote) is down 60% in the last month and the options are looking for further declines.

The photography icon fell 2.9% Tuesday to $4.08, its lowest close since Aug. 11. EK is still double its March low but well off the nine-month high near $7 that it hit in mid-September. The shares have encountered resistance at that $7 to $8 area all the way back to November, which is when shares were last above $8.

OptionMonster's tracking systems show that more than 10,000 January 4 puts changed hands, almost all of them bought for 65 cents at the same second. The volume was more than twice the previous open interest, indicating that this represented new positions being opened.

While this buying clearly shows a bearish bias for EK, roughly 200,000 shares traded at the same time. So this position could be a hedged trade that can profit if the stock moves in either direction or if volatility picks up in the name.