Options Trading News

April 11, 2012  Wed 2:27 AM CT

Whirlpool had an amazing run earlier in the year, but the bears are piling in.

optionMONSTER's Depth Charge tracking system detected the purchase of more than 7,119 May 60 puts in a single print for $0.75. Volume was more than 13 times open interest at the strike.

The trade occurred after WHR slipped below its 50-day moving average for the first time since early 2012. The stock closed at $70.46, down 5.16 percent yesterday, and would have to fall dramatically in the next six weeks for the puts to be in the money. It had a peak around $60 in late October, so the tradery could be looking for a retest of that level. (See our Education section)

The shares rallied about 70 percent between mid-December and mid-March, snapping back from a collapse over the summer that left the stock below book value. Management has been cutting costs, allowing the appliance maker to forecast a strong 2012 the last time earnings were released on Feb. 1.

The timing of the next report hasn't been announced yet, but last year it occurred in late April.

Overall option volume in WHR was more than quadruple the daily average, with puts outnumbering calls by a bearish 8-to-1 ratio, according to the Depth Charge.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »