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Huge put sale sees Cadence support

Chris McKhann (chris.mckhann@optionmonster.com)

A large player is betting that technology company Cadence Design Systems will hold current levels.

Just shy of 23,000 CDNS options have already traded, compared to the daily average of 1,496 over the last month. Almost all of that volume was in one print.

optionMONSTER systems show that 20,000 February 12 puts were sold for the bid price of $0.35 on a wide bid/ask spread. This is clearly a new position, as previous open interest in the strike was just 311 contracts.

The put selling is a bet that CDNS will hold up above $12 through expiration in mid-February. The trader also carries the risk of having to buy shares if they fall below that strike price. (See our Education section)

CDNS is down fractionally at $12.80 this morning. The chip-design company was up at $14.50 ahead of its earnings report three weeks ago and is now finding support around $12.65. 

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