C.H. Robinson Worldwide
saw interesting put volume today, but the activity was not all bullish nor all bearish -- it was a mixture of both.
Looking at Aug. 30 puts and Nov. 35 puts, it appears that some puts were bought and some puts were sold by an investor rolling out a short-put and betting that the stock won't sink below a certain level.
Today, we saw 15,000 Aug. 30 put contracts traded vs. an open interest of 17,338. These puts traded for an average price of around 30 cents. In addition, we see the Nov. 35 put options traded around $1.40. Volume for these puts hit 5,000 vs. current open interest of 173.
C.H. Robinson first-quarter earnings beat analyst estimates as the company flat-lined at 50 cents a share over the first quarter. Analysts estimate the company's earnings per share to climb to 53 cents this quarter and 54 cents in the third quarter.
C.H. Robinson's stock closed Friday at $52.55, a 58-cent drop. The company, which provides freight transportation services, came under severe pressure along with the rest of the transport industry in the first two months of the year, but has seen a bounce back from market lows since March 9 as prospects for the economy improve. The company's stock is up more than 40% since the beginning of March.
If it turns out that the Aug. 30 puts were bought to close and the Nov. 35 puts sold to open, then arguably this is an investor rolling out a bullish bet that the stock will not dip below the strike price of these puts anytime soon.
Jud Pyle is the chief investment strategist for Options News Network (www.ONN.tv) and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.
Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."