Trader sees Starwood holding gains
Starwood Hotels & Resorts is pulling back modestly after rallying with positive earnings results yesterday, but one trader apparently believes that any further downside will be limited.
optionMONSTER's data systems detected the sale of 3,065 June 62.50 puts in one print for $1.43 this morning. This is clearly a new position, as the strike's open interest was just 157 contracts before the session began.
The put seller is betting that HOT will stay above $62.50 through expiration in mid-June. The trader will be on the hook to buy shares if they fall below that strike price, but the purchase price would be $61.07 once the $1.43 credit from the put sale is factored in. (See our Education section)
HOT is down 0.7 percent at $64.07 in midday trading, a day after hitting a two-year intraday high of $65.19. The stock closed higher by 3.3 percent yesterday after the hotelier reported first-quarter results that beat Wall Street forecasts.
Total option volume in Starwood so far today is already 55 percent higher than its full-day average for the last month. The session's activity follows put selling in the August 55 strike about two weeks ago.
More From optionMONSTER
