Companhia Siderurgica Nacional continues to climb off its lows, but option activity in the Brazilian steel maker was dominated by puts yesterday.
The big trade of the day involved 2,750 September 5 puts changed hands for $1.55 against previous open interest of 3,104 contracts and 4,600 March 4 puts that went for $0.81 in volume that dwarfed open interest of just 25 at that strike.
At first it seemed that both sides were sold. But on closer examination it appears that the trader is rolling a long-put position, selling to close the nearer-term contracts and buying a new position six months at a lower strike. The number of contracts was doubled in the new puts, which could be used to protect an existing long-stock position or to make an outright bullish bet. (See our Education section)
SID was up 2.1 percent to $3.41 yesterday. Shares were above $6 in the first weeks of the year but hit a low of $2.38 in early July.
More than 9,000 SID options changed hands in all yesterday, compared to a daily average of just 541 in the last month.
More From optionMONSTER