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Large trade sees ARM holding firm

Chris McKhann (chris.mckhann@optionmonster.com)

A large trader is betting that chip maker ARM Holdings will hold current levels in coming weeks.

More than 8,500 ARMH options have traded, compared to a daily average of 1,140 in the last month. That was dominated by one print in the February 48 puts.

optionMONSTER systems show that a trader sold 8,300 of those puts for the bid price of $1.75 on a relatively wide bid/ask spread. This is clearly a new position, as volume was 10 times the previous open interest in the strike.

The put seller is looking for ARMH to hold above $48 until February expiration in about four weeks. 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)

ARMH is down 3.79 percent this morning to $48.41. The stock reached an all-time high of $55.26 a month ago and has had only one close below $48 since mid-December.

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