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Downside position targets Popular

Chris McKhann (chris.mckhann@optionmonster.com)

Puerto Rican bank Popular hit a two-month low yesterday, and one trader is looking for more losses.

optionMONSTER systems show that 25,491 BPOP options traded, compared to the total open interest of 17,457 in the name and a daily average of just 422 contracts in the last month.

A trader bought 12,459 April 25 puts yesterday for the ask price of $1.15 and sold the same number of April 20 puts for $0.35. This is new positioning, as there was no open interest at either strike before the trades appeared.

This is a vertical spread that cost the trader $0.80 to open, or just shy of $1 million in total. The maximum gain would be $4.20 if BPOP is below $20 at expiration in mid-April. (See our Education section)

BPOP slipped 0.26 percent to $30.98 yesterday, its lowest close since the first day of July. Shares haven't been below $25 since gapping up in late January, and they were last below $20 in December.

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