Home Depot gets a vote of confidence
A large trader apparently believes that downside potential is limited in Home Depot.
optionMONSTER's monitoring programs detected the sale of 4,237 October 124 puts in one print for $1.32 yesterday. Open interest in the strike was just 30 contracts before the trade appeared, showing that it is a new position.
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 Education section)
HD rose 1.15 percent to $128.29 yesterday but is down 6 percent in the last month. The home-improvement giant reported bullish results on Aug. 16 and is scheduled to release its next earnings numbers in pre-market hours on Nov. 15.
Overall option volume was about average in HD yesterday.
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