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Cree seen holding firm through report

Mike Yamamoto (mike.yamamoto@optionmonster.com)

At least one trader apparently expects Cree to hold firm through its earnings report next month.

A block of 2,000 August 47.50 puts was sold for $1.89 on Friday, optionMONSTER's tracking systems show. Open interest in the strike was just 764 contracts before the trade appeared, so it is clearly a new position.

The put seller is looking for CREE to stay above $47.50 through expiration in mid-August, while booking the $1.89 credit as profit. But if the stock falls below that strike price, the trader will be on the hook to buy shares at that level. (See our Education section)

CREE gained 2.24 percent on Friday to close at $49.40. The LED manufacturer fell sharply from above $58 after its last earnings report in April and has been trying to rebound since. The company is scheduled to announce its next quarterly results on Aug. 12, three days before that month's options expire.

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