Options Trading News

October 5, 2012  Fri 3:47 AM CT

Burger King Worldwide has been drifting lower since going public in June, and one investor is worried it may continue to fall.

optionMONSTER's Depth Charge tracking system detected the purchase of almost 4,400 November 14 puts for $0.45 and $0.50. Volume was more than 70 times open interest at the strike.

The investor now has the right to sell shares in the fast-food chain for $14 through expiration, no matter how low they may fall. That gives him or her leverage to a drop, so the position is similar to a short sale in the stock. (See our Education section)

BKW rose 0.21 percent to $14.65 yesterday. The company began trading for $14.50 on June 20 and climbed as high as $16.31 the next day, but it has been drifting lower since. Its last earnings report on Aug. 1 beat expectations, and the next release will probably take place early next month though the timing has not yet been announced.

The 58-year-old business has been owned by several parents over the years and traded as an independent firm between 2006 and 2010. That ended with an acquisition by 3G Capital, which still owns more than two-thirds of the shares.

Overall option volume was 46 times greater than average in the session, according to the Depth Charge. Puts outnumbered calls by 111 to 1.
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