Verizon Communications popped higher yesterday, but the bears see more downside into yearend.
optionMONSTER's Depth Charge monitoring system detected the purchase of 6,000 December 46 puts for $1.63 and the sale of an equal number of December 45 puts for $1.36. Volume was more than twice open interest at both strikes, indicating that a new vertical spread was initiated.
It cost $0.37, which is the maximum potential loss on the spread. The maximum gain of $0.63 would be realized if shares are below $45 at expiration. (See our Education Section for more.)
VZ fell 0.87 percent to $47.41 in late morning trading. Shares touched their lowest levels since the start of March earlier this week, but leapt yesterday on news the company may take complete control of its Verizon Wireless subsidiary.
The stock peaked above $54 in late April, and was up against resistance at $52 as recently as the last day of July.
Total option volume is twice the daily average so far today, according to Depth Charge.
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