What's behind puts in Mead Johnson

optionMONSTER

A bearish trade dominates today's option activity in Mead Johnson Nutrition.

optionMONSTER systems show that a trader bought 3,800 July 70 puts for $0.30 and sold the same number of July 90 calls for $0.35. The volume was multiples of open interest at each strike, clearly indicating that this is new activity.

This bearish combination trade takes in a small credit, which will be the profit at expiration if shares are between the two strikes at that time. But this is quite likely a collar trade to protect long shares. (See our Education section)

MJN is up 0.32 percent to $81.90 in early afternoon trading. The infant-formula company was above $85 at the end of May and at support around the $70 level in mid-March.

More than 8,100 MHN options have changed hands, already almost 10 times its daily average in the last month.

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