Timken has been struggling, and the bears aren't giving up.
optionMONSTER's Depth Charge monitoring system detected the purchase of 1,000 August 37.50 puts for $0.75 and the sale of an equal number of August 50 calls for $0.35. A block of 1,000 July 45 puts was sold at the same time for $1.65, but volume was below open interest at the strike.
It appears the investor previously owned the July contracts, anticipating that the metal-working company would push lower. Now that it has, he or she is rolling the position forward in time.
Known as a collar , the strategy is often used by investors looking to hedge a long position, so today's trader probably owns shares. (See our Education section for more ways that options can be used to manage risk.)
TKR is down 1.44 percent to $43.75 in morning trading and almost 12 percent in the last three months. The declines come despite the company reporting better-than-expected earnings and revenue on April 24.
Overall option volume in the name is 6 times greater than average so far today, according to Depth Charge.
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