Shares of Hewlett-Packard continue to climb, and one trader is using options to protect a large stock position.
optionMONSTER systems show that more than 13,000 HPQ options have changed hands, led by 6,500 November 21 puts bought for the ask price of $2.12. This is clearly a new position, as volume was well above the strike's open interest of 1,753 before the session began.
About a minute later the biggest block of stock traded, with 650,000 shares bought for $21.19. This suggests that the put buying is a hedge to protect that stock position. The combination of long stock and puts is essentially the same as buying calls . (See our Education section)
HPQ is up 1 percent to $21.30 this morning, breaking up through resistance and into the gap that was opened on April 10. The computer maker's shares hit a high of $24.05 on the first day of that month.
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