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Large bearish spread targeting EMC

Chris McKhann (chris.mckhann@optionmonster.com)

A large put spread topped yesterday's option activity in EMC as shares of the cloud-computing company continue to rebound.

optionMONSTER's Depth Charge system detected the purchase of 10,000 October 20 puts for $0.70 and the sale of October 15 puts for $0.17. The volumes were greater the open interest in each strike before the session began, indicating that this is new positioning.

The vertical spread cost the trader just $0.53, which is the most that can be lost. The maximum gain of $4.47 would be realized if EMC is below $15 at expiration in mid-October. (See our Education section)

EMC was up 2.33 percent on the day to close at $22.36. Shares were up near resistance at $26 just over a month ago and hit a low of $21.45 on Friday.

More than 142,000 EMC options changed hands in total yesterday, compared to a daily average of 21,000.

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