Why trader is selling puts in Sprint

optionMONSTER

The biggest trade of the day so far is put selling in Sprint.

More than 20,000 Sprint options have traded this morning, already 5 times its full-session average for the last month. optionMONSTER systems show that almost all of that action is in the November 6 puts, where a block of 14,705 sold for the bid price of $0.23. This is a new position, as its volume was above the strike's previous open interest of 11,437 contracts.

The put selling , which isn't tied to any trading in Sprint shares identified by our systems today, will profit if the stock holds above $6 through expiration in about five weeks. But the trader may actually be hoping for a pullback below that level to purchase shares at an effectively discounted price of $5.77, including the credit from the put sale. (See our Education section)

S is up 1.4 percent to $6.09. The wireless carrier has been holding support at $6 on a closing basis over the last week. Shares were up at $7.25 in early August.


More From optionMONSTER

Rates

View Comments (1)