Options Trading News

February 26, 2014  Wed 4:45 AM CT

Traders apparently think that the bottom will fall out of Expeditors International.

optionMONSTER's Depth Charge monitoring program detected the purchase of 3,300 April 40 puts yesterday, most of which priced for $1.65. Volume was more than 200 times higher than the previous open interest at the strike, indicating that new positions were initiated.

Those buyers now have the right to sell the stock for $40 in the next two months no matter how far it may fall during that period. The puts carry the potential for significant leverage if shares continue to push lower. (See our Education section)

EXPD dropped 7.02 percent to $39.06 yesterday after earnings missed estimates. While the shipping company has benefited from increased volumes, weak pricing has hurt profit. Shares are down 12 percent so far this year, while the broader market is little-changed in the same period.

Overall option volume in Expeditors was 13 times greater than average in the session, according to the Depth Charge. Overall puts accounted for a bearish 79 percent of the total.
Share this article with your friends

Related Stories


Will Expedia keep heading south?

November 18, 2015

The online travel agency gapped up after a bullish quarterly report in late October but dropped early this month when market leader Priceline plunged on weak guidance.


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 »