Ctrip.com gets vote of confidence
Chris McKhann | firstname.lastname@example.org
optionMONSTER systems detected the sale of 3,000 March 50 puts for the bid price of $4.80. Open interest in the strike was just 617 contracts before the trade appeared, showing that it is a new position.
The put seller is looking for CTRP to hold above $50 through expiration in mid-March, at which time the $4.80 credit would be kept as profit. The trader risks having to buy shares if they fall below that $50 level, but that might be his or her intent because the stock price is so close the strike. (See our Education section)
In that case, the effective purchase price would be $45.20 once the credit from the put sale is included. Traders sometimes sell puts this way in hopes of picking up a stock at a discount.
CTRP is down 0.91 percent to $50.16 today, pulling back from gains of the previous two sessions. It was below $50 this morning and as low as $46.63 on Friday.