Phoenix New Media has pulled back sharply in recent days, but one large trader is betting that further losses will be limited for the Chinese Internet stock.
More than 5,800 July 7.50 puts were sold on Friday, almost all of them going for the bid price of $0.75 in about a minute on Friday, according to optionMONSTER's tracking systems. This is clearly a new position, as open interest in the strike was just 320 contracts before the session began.
The put seller will keep the $0.75 credit as profit if the stock stays above $7.50 through expiration in five months. If it falls below that strike price, however, the trader will be on the hook to buy shares at that level. (See our Education section)
FENG fell 5.64 percent to $10.04 on Friday but held support at its 50-day moving average. The Beijing-based online content company has fallen in the last two sessions after hitting a three-month high of $11.65 last Wednesday.
The put selling pushed total option volume in the name to nearly 6,300 contracts on Friday, 26 times its daily average for the last month.
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