Protection on Adobe before earnings

optionMONSTER

Adobe Systems reports earnings tomorrow afternoon, and investors are hedging their bets.

optionMONSTER's Depth Charge monitoring system detected the purchase of about 2,000 April 39 puts for $0.76 to $0.81. Volume was almost 4 times open interest at the strike.

The investor now has the right to sell ADBE shares for $39 through expiration, no matter how low they may drop. That will give him or her insurance against a pullback. (See our Education section for more on how options can be used to manage risk.)

ADBE is down off 0.22 percent to $41.29 in morning trading but is up 22 percent in the last year. The maker of artistic and publishing software has been climbing recently as it transitions to a subscription-based revenue model.

Total option volume is more than triple the daily average so far today, according to the Depth Charge. Puts outnumber calls by more than 20 to 1.


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