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Cadence attracts large put sale

Chris McKhann (chris.mckhann@optionmonster.com)

Cadence Design Systems has been on a roller-coaster ride in recent months, but one trader is looking for shares to stabilize at current levels.

optionMONSTER systems show that 13,000 November 14 puts were sold in one print for $0.40 yesterday. This is a new position, as there was no previous open interest in that strike.

The put seller will keep the $0.40 credit as profit if CDNS holds above $14 through expiration in mid-November. If it falls below that strike price, the trader will be on the hook to buy shares at that level. (See our Education section)

CDNS fell 0.7 percent to close at $15.53 yesterday after peaking at $15.91 earlier in the session, its highest price since hitting a six-year high in March. The company, whose software is used to design integrated circuits, then plunged to support at $13.63 after earnings results came out in mid-April.

Yesterday's put sale made up almost all the option volume in CDNS, which has averaged just 245 contracts a day for the last month.

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