Caution reigns in American Capital

optionMONSTER

 With earnings after the close, American Capital sees a big put roll.

optionMONSTER systems show that 25,000 of the August 12 puts were sold for $0.01 against open interest of 25,104. Seconds later, a matching number of November 12 puts were bought for $0.17. That volume was five times the previous open interest, so that was a new position.

The trader is rolling out of their expiring puts and moving considerably further out in time. This is very likely done against long stock as a hedge as opposed to an outright bearish play. He or she paid $0.16 and now has an additional three months of downside protection. (See our Education section.)

ACAS fell 0.26 percent to $15.18 in late morning trading and is in the middle of the increasingly tight range on the day.

Total option volume is 8 times greater than average in the session, with puts outnumbering calls by 24 to 1.


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