What's behind combo trade in Yahoo

optionMONSTER

A bearish combination trade tops the option action in Yahoo today with shares near five-year highs, though it coud be hedging a long position.

optionMONSTER systems show that a trader sold 5,000 July 24 calls for the bid price of $0.54 and bought 5,000 July 19 puts for the ask price of $0.63. The volume in the latter strike was below the previous open interest, but this appears to be a new position.

The trader spends $0.09 for the combination, which is at risk if YHOO remains between $19 and $24. On its face, the risk appears to be shares running above $24, at which point the trader would have to sell shares. But the trade could be tied to long shares as a protective collar strategy .

YHOO trades at $21.17, up fractionally on the day. The Internet giant is just off of Friday's close, which was the highest since July 2008.

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