NII Holdings hit a nine-year low yesterday, and huge option trades are looking for the stock to fall even more through the end of 2012.
NIHD fell 1.29 percent to close at $6.91 after hitting an intraday low of $6.56. Shares of the Latin American telecom carrier have been dropping steadily since trading above $43 a year ago and are now trading at their lowest level since July 2003.
More than 23,040 December 7 puts traded in a strong buying pattern, with the two largest blocks of 9,200 each going for $1.35 and $1.40, according to optionMONSTER's Depth Charge system. Open interest in the strike was a mere 69 contracts at the beginning of the day, so these are clearly new positions.
Because of their enormous size, these put trades appear to be a straight bearish bet rather than a protective hedge on a long position. They will turn a profit if NIHD is down more than 18 percent by expiration in mid-December. (See our Education section)
Traders were also selling August calls in the name on July 11. The company is scheduled to report earnings results in the pre-market on Tuesday, Aug. 7.
Total option volume in the name yesterday was 11 times its daily average in the last month. Puts outpaced calls by more than 4 to 1, a reflection of the session's bearish sentiment.
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