Large position adjusts to drop in Lowe's
David Russell | [email protected]
optionMONSTER's tracking programs detected a surge of activity in the October 21 puts and the January 17.50 puts. About 15,000 of the October contracts were bought for $2.10 and $2.15 against existing open interest, while 20,000 of the Januarys were sold for $1.03.
The investor appears to have previously sold the October puts, betting that the home-improvement stock would hold its ground above $21. Shares then fell and have found themselves underwater. Today's adjustment lowers the level at which the trader must buy shares and provides more time for LOW to rebound.
Similar trades were common about a month ago after the market crashed in late July and early August. (See this column for more)
LOW fell 2.71 percent to $19.05 in afternoon trading. Sales missed estimates the last time it issued results on Aug. 15, and management cut guidance amid weak demand.
Overall option volume is 5 times greater than average today, with puts outnumbering calls by 19 to 1.