Time Warner Cable sees put selling

Chris McKhann (chris.mckhann@optionmonster.com)

A long-term trader apparently believes that any downside will be limited in Time Warner Cable, which came off Friday's highs yesterday.

optionMONSTER systems show that a big block of 9,250 January 2015 85 was sold for the bid price of $6.60. This is clearly a new position, as open interest in the strike was just 145 contracts before the trade appeared.

The put selling is a bet that TWC will hold current levels or at least not fall back below $85 in the long term. If it does, the trader will be obligated to buy the shares if assigned. (See our Education section)

TWC jumped higher Friday on takeover speculation to a new high above $104, but shares finished yesterday down 2.54 percent to $101.29. The cable operator has closed below $85 only once since last July.

More than 17,000 TWC options changed hands overall, compared to the daily average of 2,341 contracts in the last month.

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