OpenText is higher today, but the bears refuse to back down.
optionMONSTER's Depth Charge monitoring program detected the purchase of some 3,500 November 60 puts for $5.40 and the sale of an equal number of May 60 puts for $1.05. Volume was below open interest in the may contracts but not November, which suggests that an existing position was closed and rolled forward in time.
Making the adjustment cost $4.35 and gives the trader an additional six months of downside exposure to the company, which provides enterprise software and services. The puts lock in the price where he or can sell the stock, which gives them an inverse correlation to the stock price. (See our Education section)
OTEX is up 11 percent to $62.54 in morning trading and is back to its highest level in more than a year. The stock is up today despite earnings and revenue missing analyst estimates yesterday afternoon.
Short positions represented more than 16 percent of the float at the end of last month, so today's surge may result from bears being forced to cover bets against the company.
Overall option volume is 33 times greater than average so far today, according to the Depth Charge. Puts account for more than 90 percent of the total.
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