Call selling is looking for limited volatility in Host Hotels and Resorts.
More than 14,700 HST options changed hands yesterday, compared to the daily average of 801. Virtually all of that volume was in the December 19 calls, where a single print of 14,427 was sold for the bid price of $0.40. The previous open interest at that strike was 123 contracts, so this is clealry a new position.
Less than a minute later, a single block of 720,700 shares of HST was bought for $18.99. Taken together, the stock and option trades create delta-neutral position that is betting on lower volatility that that implied by the options. (See our Education section)
HST lost 0.84 percent to close at $18.85 yesterday, in the middle of its recent range. The stock hit a 52-week high of $19.26 two weeks ago.
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