Pandora faces bearish strategy

optionMONSTER

A large trader is looking for Pandora to continue pulling back.

optionMONSTER systems detected the purchase of 10,000 November 27 puts for the ask price of $0.85 and the sale of 10,000 November 25.50 puts for $0.25. Volume was well above the previous open interest in each strike, clearly indicating that new positions are being established.

The trader pays the $0.60 for the chance to make $0.90 in this bearish vertical spread . That gain would be realized if P is below $25.50 by expiration at the end of next week. (See our Education section)

P is down 2.27 percent to $26.75 in afternoon trading. Shares were down at $18 into the start of September but bounced off support at the end of last week. The Internet radio company peaked at $28.26 on Oct. 18, its highest price since going public two years ago.

Total option volume in the name is just above 32,000 so far today, already more than double its full-session average for the last month. Overall puts outnumber calls by 12 to 1, a reflection of the day's bearish sentiment.


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