Option activity is showing support for Hong Kong-based Focus Media today after Chinese markets rallied strongly overnight with news of economic stimulus in that country.
optionMONSTER's tracking systems detected the sale of 2,000 January 24 puts for $1.80 early this morning. Open interest at the strike was 1,143 at the start of the session, indicating that this is a new position.
FMCN is off 0.37 percent to trade at $24.32 this morning. The company, which operates digital advertising screens in China, drew bullish option activity on Aug. 10 and gapped higher to $26 in the next session after news of a possible deal aimed at taking the company private. Since then, however, shares have drifted lower.
Today's put seller is betting that FMCN will hold current levels above the $24 strike price at expiration. If shares are below that level, the trader will be required to buy the stock if assigned, though the effective purchase price would be $22.20. (See our Education section)
Disclosure: I am long FMCN.
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