A huge bearish spread tops today's unusual activity in wireless communications company NII Holdings.
optionMONSTER's Depth Charge system shows that a trader bought 10,000 September 6 puts for the ask price of $0.80 and sold the same number of September 4 puts for the bid price $0.20. The volume was about 10 times the previous open interest at each strike, clearly showing that this is new activity.
The vertical spread cost the trader $0.60 to open, which is the amount at risk if shares remain above $6 through expiration. The trader could make $1.40 if the stock falls below $4 by that time. (See our Education section)
NIHD is down 6.6 percent today to $6.90, pulling back from resistance at the $7.50 level. Shares of the Latin American company hit a 52-week low of $4.11 a week ago.
More than 26,000 NIHD options have changed hands so far today, with only 1,506 calls. This volume compares to daily average of 1,875 contracts in the last month.
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