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Put seller sees Seagate holding up

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Seagate has been rebounding in the last week, and one trader is betting that its stock will hold up through early 2013.

optionMONSTER's tracking systems detected the sale of 9,000 January 27 puts in a single print for $0.82 this morning. The volume was well above the strike's open interest of 1,183 contracts at the start of the session, indicating a clearly new position.

The put seller is counting on STX staying above the $27 strike price at expiration in mid-January. If it is below that level, the trader faces the obligation to buy the shares at an effective price of $26.18 once the credit from the put sale is included. (See our Education section)

STX is up 2.33 percent to $29 today. The compter hard-drive maker had been trending steadily lower since August but bounced strongly last week at the $25 level. Arch rival Western Digital rebounded at the same time.

Options have been active in STX since then, both to the upside and the downside . Total option volume in the name is already 35 percent higher than its full-session average.

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