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How trade shows confidence in KKR

David Russell (david.russell@optionmonster.com)

One investor is turning time into money with KKR.

optionMONSTER's monitoring programs detected the sale of 6,244 June 20 puts for $0.60 and the purchase of an equal number of May 19 puts for $0.10. Volume was below open interest in the May contracts, indicating that an existing short position was closed and rolled forward in time.

The investor had probably sold the May 19s at an earlier time, looking for the private-equity firm to remain above that strike price. Now that the stock has risen above that threshold, he or she is moving the position to the June 20s, collecting an additional $0.50 of income and committing to the trade for another month. The bullish adjustment, which now sees KKR staying above $20, also raises the price at which the trader has agreed to buy shares. (See our Education section for more on short puts .)

KKR rose 0.15 percent to $20.50 yesterday and is up 34 percent so far this year. Shares have been steadily melting higher as a rising stock market drives up the value of the company's investments, leading profit to beat expectations in the last two quarters.

Total option volume in the name was 7 times greater than average in yesterday's session.

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