Traders apparently believe that downside potential is limited in Ocwen Financial.
OptionMonster's monitoring systems detected the sale of more than 16,500 January 4 puts for $0.15 today. This is clearly new positioning, as open interest in the strike was only 725 contracts before the trades appeared.
Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think that the risk of a big drop is limited. (See our Education section)
OCN is up 2.91 percent to $4.95 in afternoon trading and is up 47 percent in the last three months. The mortgage-servicing firm is expected to release quarterly results after the close on Feb. 28.
Overall option volume is 6 times greater than average so far today.
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