Options Trading News

One trader is positioning for another weak earnings report from Adobe Systems.

optionMONSTER's Depth Charge monitoring system detected the purchase of about 2,000 July 32 puts for $1.30 and the sale of an equal number of July 29 puts for $0.40. Volume exceeded open interest at each strike, indicating that a new position was initiated.

The trade cost $0.90 and will earn a maximum profit of 233 percent if the software stock closes at or below $29 on expiration. See our Education Section for more on the strategy, which is known as a bearish put spread because it leverages a move between two prices.

ADBE is down 0.25 percent to $32.31 in morning trading. It peaked at $34.78 on April 2, pulled back to $30 earlier this month but has been bouncing since then. Some chart watchers may expect another push to the downside now that the shares have returned to their 50-day moving average.

Revenue missed expectations the last time results were published on March 19, and today's put buyer may expect similar news from the company after the bell tomorrow.

Overall option volume is 6 times greater than average so far in the session, with puts accounting for more than three-quarters of the total.