Bears apply more pressure to VanceInfo
David Russell | firstname.lastname@example.org
optionMONSTER's Depth Charge monitoring system detected the purchase of about 2,000 August 10 puts, most of which priced for $1.90. Volume was more than 14 times open interest in the strike.
Those puts are in the money, so they will closely track declines in the Chinese information-technology stock. The trade is probably the work of a speculative bear rather than an investor looking to protect a long position because if the shares rise they would lose more money on the puts than what would be earned on the stock. (See our Education section)
VIT is down 5.75 percent to $8.20 in morning trading. It rallied more than 800 percent between early 2009 and late 2010 but lost its mojo as investors lost interest in Chinese stocks. Shares have been consolidating around their current level since last summer while hitting resistance at their 200-day moving average. That could make some chart watchers think that more downside is coming.
Overall option volume is more than 100 times greater than average so far today, with puts outnumbering calls by more than 300 to 1.