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Traders call a bottom for Ocwen

David Russell (david.russell@optionmonster.com)

Someone thinks the bottom is in for Ocwen Financial.

optionMONSTER's tracking systems detected the sale of about 23,000 April 35 puts, most of which priced for $0.70. That was above previous open interest of 17,278 contracts, an indication that new positions were initiated.

Writing puts generates income while obligating the investor to buy shares at the strike price if they go under that level. The strategy is neutral to bullish, but has downside risk if a selloff occurs. (See our Education section.)

OCN fell 1.40 percent to $37.99 yesterday, and has lost more than 30 percent of its value so far this year. The stock quadrupled between the start of 2012 and last October as managed amassed a portfolio of mortgage-servicing rights. But it's recently had regulatory difficulties in New York, where officials have blocked a planned purchase of loans from Wells Fargo.

Wednesday's put seller apparently thinks all the risk is priced into the stock and will hold its ground or rebound.

Total option volume was 6 times greater than average in the session.

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