Sirius XM Radio has been climbing for years, and one investor apparently thinks that it's a safe bet in the long term.
optionMONSTER's tracking programs detected the sale of 85,000 January 2015 2 puts for $0.14. It was the largest trade in any instrument aside from the volatility index in the entire session yesterday.
The put seller is now on the hook to buy shares in the satellite-radio company for $2 if they're below that level upon expiration 18 months from now. In return for making that pledge, he or she collected the credit of $0.14.
The trader probably likes the stock and would be willing to own it if the shares drop all the way to $2. This way, the investor can make some money from the name without ever owning it, while also programming a buy order at a deep discount to the current price. (See our Education section for more on the strategy.)
SIRI rose 4.06 percent to $3.33 yesterday and is up 76 percent in the last year. The company has been climbing steadily since early 2009 as it adds customers and earns more revenue per user.
Total option volume was more than quadruple the daily average in the session.
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