Procera gets clear show of support

optionMONSTER

One trade apparently believes that any downside in Procera Networks will be limited for the next two months.

optionMONSTER's tracking systems detected the sale of 3,801 November 15 puts yesterday, including one block of 3,671 that went for the bid price of $0.90. This is clearly a new position, as open interest at the strike was just 167 contracts before the session began.

The put seller will keep the $0.90 credit as profit if PKT holds above $15 through mid-November. If it falls below that level, the trader will face the obligation to buy shares at an effective price of $14.10 when the credit is included. Investors sometimes sell puts with the hope that a stock will pull back so that it can be purchased at a discount , though it isn't clear if that is the intent in this case. (See our Education section)

PKT rose 1.12 percent to $15.39 yesterday. The broadband-technology company fell after its last quarterly report in early August but bounced off support at $12 and has been trending higher for the last month, rising back above its 200-day moving average.

Yesterday's put sale pushed total option volume in Procera to 28 times its daily average for the last month.


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