What put action means in LDK Solar
Chris McKhann | [email protected]
LDK is down 1.52 percent at $4.54 but is still in its range from yesterday, when it opened at $4.22. Shares of the Chinese solar-technology company have been gaining essentially every day for the last three weeks since bouncing off a low of $2.57.
Option volume in the name already tops 86,000 contracts so far today, compared with its full-day average of 17,000. The big trade involved 24,800 each of the December 5 puts and March 3 puts.
The Decembers were sold for $0.76 against open interest of 41,495. The March contracts were bought for $0.81 with volume that was well more than open interest, so this side of trade was clearly done to open a position.
The overall trade is very likely rolling a position to March from December contracts as expiration in the latter is just a week away. The trader exchanges those in-the-money expiring puts for some that are well out-of the money but needs to spend $0.05 only to get more time for the strategy to work.