Bears still running the show at Santander

optionMONSTER

Banco Santander has been falling, and the bears are still running the show.

optionMONSTER systems show that more than 10,000 SAN options have traded, three times the daily average. Almost all of the action is in a June put spread. A trader sold two blocks of 1,500 of the 6 puts for $0.25 and $0.20 against open interest of 6,795 contracts. At the same time, they bought 6,000 of the 5 puts for the ask price of $0.10. Volume exceeded open interest in the 5s, so it was a new position.

This could be a new opening backspread. In that case the trader would make a small profit if SAN remains above $6 or could make profits if shares fall sharply. It is more likely that the trader is rolling the puts down and doubling the size while taking a bit of profit off the table.

SAN fell 1.14 percent to $6.95 in morning trading, and has been trending lower since hitting a high of $8.86 in late January. Today's level is down to support last tested in mid-November and in August before that.

Puts outnumber calls in the Spanish lender by more than 20 to 1 so far today.

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