As United Rentals struggles to bounce off its lows of the year, one trader is betting on a floor beneath the stock.
optionMONSTER's systems detected the sale of 2,800 January 18 puts for $1.15 in late-afternoon trading. Open interest in the strike was just 119 contracts at the beginning of the day, so this is a new position.
The put seller represents a belief that URI will be above the $18 strike price at expiration, a level not seen since October of last year. If the stock is below that price at that time, the trader faces the possibility of having to buy the stock , but at an effective price of $16.85. (See our Education section)
URI rose 1.04 percent yesterday to close at $28.07, down more than 40 percent from its 52-week high near $48 in late April. The equipment-rental company gapped down from above $34 on July 18 after reporting second-quarter earnings, and stock reached its 2012 lows under $27 late last week.
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