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What's behind put buying in Gannett

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Gannett has pulled back since hitting a four-year high last month, and traders are positioning for another potential drop.

More than 3,000 October 23 calls were purchased in 3 minutes this morning, almost all of them for $0.80, according to optionMONSTER's systems show. This is clearly new positioning, as open interest in the strike was just 880 contracts before the session began.

These options guarantee a $23 sale price for the stock through mid-October no matter how far it might fall, though they will expire worthless if shares remain above that level. The puts could have been to hedge a long position established earlier or as an outright bet that the stock will decline. (See our Education section)

GCI is off 0.82 percent to $24.17 this morning, its session low. The media conglomerate reported mixed second-quarter results on July 22 but gapped above $26.50 from below $20 with the acquisition of television company Belo in a deal valued at $2.2 billion. Shares rose to $26.88 on July 18, their highest price since June 2008, but have been trending lower since then.

Today's put buying has made up almost all the option volume in GCI so far, which is already more than triple its full-session average for the last month. Only 44 calls have traded in the session.

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