Trade sees Zynga holding lows

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One big investor thinks Zynga is down but not out.

Yesterday's big trade occurred in long-term put contracts, with 20,000 of the January 2.50 contracts bought for the ask price of $0.20 against open interest of 34,271. At the same time they sold 29,137 of the January 2015 2s for their bid price of $0.25. It was done against open interest of 1,450 so a new position was initiated.

It may have been a new opening diagonal spread. That would mean the trader is looking for ZNGA to fall below $2.50, but not below $2. It is more likely the roll of the short position, with the trader buying back the nearer puts and selling the further. That also is looking for shares to remain above $2. (See our Education Section .)

ZNGA rose 1 percent to $2.91, in the middle of its 52-week range. Shares approached $2 in November and climbed from there to just above $4 in mid-March. Since then they have settled between the two prices.

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