Bears target News Corp. pullback
David Russell | [email protected]
optionMONSTER's Depth Charge monitoring system detected the purchase of 3,058 October 27 puts for $0.60 and the sale of an equal number of October 31 calls for $2.30. They collected a credit of $1.70 in the process.
The investor probably owns shares in the media giant, which rallied more than 80 percent between the start of 2012 and last month. He or she has now pledged to sell their stock for $31 if it's above that level on expiration and has locked in a minimum selling price of $27 if it goes below that level. Including the credit earned, they will receive between $28.70 and $32.70 in this collar trade.
NWSA is down 2.88 percent to $31.53 in early afternoon trading. It's enjoyed a steady stream of positive earnings and enthusiasm about plans to split into two companies but has been losing momentum since the last quarterly report a month ago.
Overall option volume is about 50 percent greater than average in the name so far today, with the downside trade accounting for more than half the total.