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Big trade sees floor beneath Luxottica

Chris McKhann (chris.mckhann@optionmonster.com)

Luxottica is down from an all-time high reached on Friday, but a huge trade is betting against a steep drop in shares of the Italian luxury-eyewear maker.

More than 10,000 LUX options have already traded, while the daily average in the last month is just 19 and total open interest across strikes is 914. Virtually all of the volume was in the April 45 puts, where a trader sold 10,000 contracts mostly for $0.10.

The put selling is a bet that LUX will hold above $45 in the coming weeks. The risk is that the trader is obligated to buy shares if they are anywhere below that price at that time. They would then have to buy 1 million shares of LUX, compared with a total volume of just 25,000 so far today. (See our Education section)

LUX is down 1.06 percent to trade at $50.31. The Milan-based company hit a lifetime high of $51.18 on Friday after running up from a 52-week low of $31 in early June. 

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