Edwards Lifesciences is down big today, but one investor apparently believes that the worst of the selling is over.
optionMONSTER's tracking systems detected the sale of about 2,000 March 70 puts, most of which priced for $1.85 to $1.95. Volume was almost 8 times open interest in the strike.
EW is down 11.48 percent to $71.41 after issuing weak guidance for the second straight quarter yesterday afternoon. The maker of heart-care products had rallied more than 20 percent in the two months leading up to the release.
Selling puts obligates the investor to buy shares for $70 if they fall that low. But given the premium earned, their entry price would be closer to $68.10. The strategy, also known as writing protection, is a common way to earn income without ever owning shares, and makes sense when a selloff appears to be overdone. (See our Education section)
The trade pushed overall option volume in EW to 5 times greater than average so far today.
More From optionMONSTER
European stocks rose for a third straight session on Monday and the euro bounced back from two-year lows, as Greek …
There are no comments yet