Heavy put selling looks for floor in XPO
XPO Logistics has dropped sharply in recent weeks, but traders apparently believe that further declines will be limited.
optionMONSTER's monitoring systems detected the sale of more than 14,000 January 24 puts for $0.30 to $0.35 today. Volume was more than 61 times open interest at the strike, which indicates that new money was put to work.
Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think that the risk of a big drop is limited. (See our Coaching section)
XPO is down 0.37 percent to $26.37 in morning trading and has fallen 12 percent in the last month. The transportation and logistics company is expected to report earnings after the close on Feb. 18.
With today's put selling, total option volume in the name is already 22 times its full-session average for the last month.
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