Alcatel-Lucent has pulled back from two-year highs reached earlier this month, but a large trader is betting that shares will hold current levels.
optionMONSTER's tracking systems detected the sale of 30,000 January 3.50 puts in two prints for $0.35 yesterday. This is clearly a new position, as open interest in the strike was just 5,491 contracts before the trade appeared.
These short puts are looking for ALU to stay above $3.50 through expiration in mid-January, at which time the trader would keep the $0.35 credit as profit. But if the stock falls below that strike price, the trader will be on the hook to buy shares at that level. (See our Education section)
ALU, which briefly traded below $1 a year ago, was up fractionally yesterday at $3.68. The Paris-based networking company peaked at $4.02 on Oct. 3, its highes price since July 2011, but fell sharply last week after announcing plans to cut as many as 10,000 jobs.
The company plans to release third-quarter results on Oct. 31.
Yesterday's put selling pushed total option volume in the name above 40,700 contracts, more than triple its daily average for the last month.
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