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April 20, 2012  Fri 9:33 AM CT

CTRP: SEE CHART GET CHAIN FIND STRATEGIES
As Ctrip.com hovers just above two-year lows, a large option spread appears to be positioning for more downside.

CTRP trades at $21.31, up o.92 percent on the day. Shares of the Chinese online travel service have lost about 60 percent of their value in the last year, trending down from above $50 last April while consistently seeing lower highs and lower lows. The stock was at a two-year low of $20.65 at the start of the month.

More than 21,000 CTRP options have changed hands already this morning, about 10 times the daily average. Most of this is tied up in a three-way spread.

optionMONSTER's systems show that a trader sold 8,000 April 23 puts for $1.70 against open interest of 8,858, bought 8,000 May 23 puts for $2.35, and sold more than 4,000 May 23 calls for $0.60 across exchanges. The volume at the May strikes was more than open interest.

Today is the last day of trading for those April options, so the trader is apparently rolling out the puts and adding some short calls at the same time. Given that the puts are in the money, it is very likely that this is a continuation of a bearish play that the trader wants to extend for at least another month. (See our Education section)
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