Raytheon Draws Heavy Put Volume

By David Russell, reporter at OptionMonster

WALTHAM, Mass. (TheStreet) -- Traders in Raytheon(RTN Quote) are positioning for a move lower prior to the defense company's earnings report Thursday.

Put volume surged in Raytheon Wednesday as some 28,720 puts changed hands, 17 times the average number. The downside options outnumbered calls by almost 4 to 1 in the session, according to OptionMonster's tracking systems.

The November 45 strike was the busiest, trading 11,410 times against open interest of 2,577 contracts. Buying dominated the activity, with most of the large transactions pricing for 90 cents to 97 cents. Some traders paid as much as $1.36.

The stock slipped 0.8% to $45.18 Wednesday and is little changed over the last three months, lagging a 13% gain in the S&P 500. On July 23, the company reported better-than-expected second-quarter results and management raised the full-year outlook.

The stock must fall about 3% by expiration for November 45 puts to turn a profit.

The second most active option on Raytheon was the January 41 put, which saw large institutional purchases of 65 cents to 80 cents. Other investors purchased the December 45 puts for $1.30 to $1.47.

The January strikes traded 6,168 times, about 20 times open interest, while volume on the December puts was more than 1,000 times open interest at 5,369 contracts.