Pitney Bowes draws heavy put action

optionMONSTER

Pitney Bowes has been struggling to recover in the last year but is facing a new put position.

optionMONSTER's Depth Charge system shows that a trader sold 31,330 of the April 8 puts for the bid price of $0.05 yesterday in volume that was below the previous open interest of 41,793 contracts. At the same time, he or she bought 15,665 July 8 puts for the ask price of $0.25 in volume well above that strike's open interest of 1,478 and therefore a new position.

This could be a new diagonal spread , which would be looking for PBI to hold above $8 through April and then fall from there. But it seems more like that the trader is rolling an April long-put position forward by two months while cutting the number of contracts in half, profiting if the stock falls below $8 by mid-June. (See our Education section)

PBI rose 0.9 percent yesterday to $13.46. The mail-processing equipment maker was up at $14.49 last week after reporting earnings results but has been giving up some of that gain since then. It was down at a 52-week low of $10.34 at the end of 2012.  

More than 56,000 PBI options traded yesterday, compared to a daily average of 5,421 in the last month. Fewer than 1,600 of those contracts were calls.

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