Why put action is surging in Motorola

RELATED QUOTES

SymbolPriceChange
MSI57.810.33

Shares of Motorola Solutions are bouncing this morning, but put trading tops the action activity.

MSI is up 1.37 percent to $47.48 after seeing its lowest close since early February yesterday. Shares of the communication software maker had run up above $52 but have given up most of that ground in the last month.

optionMONSTER's systems show that 7,200 MSI options have already traded this morning, more than 12 times its daily average of 577 in the last month. More than 3,400 each of the June 46 and July 45 puts have changed hands.

The big blocks moved at the same time with 3,100 of those June puts sold for $0.53 against open interest of 3,515, while the July 45 puts were bought for the ask price of $1.17.

Given that the June options expire in a little over a week, which happens to be the period of greatest time decay , this is very likely a roll. In that case the trader is selling long puts in June to close that position and buying new puts in July. This could be either be an outright bearish bet or hedging on a long stock position. (See our Education section)

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