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August 24, 2012  Fri 11:58 AM CT

PHH: SEE CHART GET CHAIN FIND STRATEGIES
Mortgage servicer PHH is near its 2012 highs, and bearish spread dominates the options action.

The trader bought 1,815 January 15 puts for $1.05 ask price and sold the same number of the 10 puts for the bid price of $0.15. The volume at both strikes was more than open interest so this was a new opening put spread.

It cost $0.90 to open, with a maximum profit of 455 percent if the stock closes at or below $10 on expiration. The initial outlay is all they can lose if it doesn't drop.

PHH rose 0.79 percent to $17.89 in late morning trading. It made a 2012 closing high of $18.31 last week, and appears to have significant support around $15.

Total option volume is 14 times greater than average, with that spread accounting for the entirety of the action.
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