VeriSign is seeing a large volatility play as the stock retreats from yesterday's close, its highest close in more than three years.
VRSN is down 0.75 percent to trade at $37.18. Yesterday's close was the highest since July 2008, though the intraday high of $37.73 was set in May. Shares of the Internet infrastructure company have run up from $27 in the last four months.
Dominating the unusual option volume in the name are the February 36 puts, where 6,500 contracts traded for $0.27. That single print was 6 times its daily average and represented almost all of this morning's volume in the name. The price was just off the ask price, suggesting that the puts were bought.
About a minute later, a block of 130,000 shares of VRSN was bought for $37.40. This would balance the overall delta of the position and create a strategy that can profit if shares move sharply higher or lower.
The implied volatility of those puts is 23 percent. That is in line with the average implied volatility and higher than the actual volatility but down from 55 percent in early October.
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