AutoNation has pulled back from all-time highs reached last month, but traders are betting that further losses will be limited in coming weeks.
More than 7,000 June 52.50 puts were sold for $0.90 to $1.10 yesterday, according to optionMONSTER's tracking systems. The volume was well above the strike's open interest of 1,314 contracts, indicating that new positions were established.
These put sellers are looking for AN to stay above $52.50 through expiration in mid-June. If the stock falls below that strike price, the traders will be on the hook to buy shares at that level. (See our Education section)
AN was down fractionally yesterday to close at $53.57. The auto retailer spiked to a lifetime high of $56.10 after reporting first-quarter results on April 17, but shares then declined and have been trading sideways along their 50-day moving average since.
The session's put selling made up almost all the option volume in AutoNation yesterday, which was more than 17 times its daily average for the last month.
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