The bears still hate Ctrip.com.
optionMONSTER's Depth Charge tracking system detected the purchase of about 8,000 March 24 puts for $1.50 and the sale of an equal number of March 20 puts for $0.25. Volume was more than quadruple open interest in both strikes.
The trade cost of $1.25 and will earn a maximum profit of 220 percent if the Shanghai-based online travel stock closes at or below $20 on expiration. It's known as a bearish put spread because credit from selling one contract is used to defray the cost of buying another one that's closer to the money . (See our Education section)
CTRP is up 0.28 percent to $24.79 in midday trading but has lost 40 percent of its value in the last year. It had fallen amid negativity toward Chinese stocks and gapped lower in November after management issued weak fourth-quarter guidance. The next earnings report is scheduled for the overnight period between Feb. 21 and Feb. 22.
Overall option volume is 8 times greater than average in the name so far today, with puts outnumbering calls by 40 to 1.
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