How investor is hedging Ctrip.com
Chris McKhann | [email protected]
optionMONSTER systems show that a trader bought 7,739 December 55 calls for the ask price of $0.10 against previous open interest of more than 13,000. At the same time, he or she purchased 9,000 January 41 puts for the ask price of $0.55 and sold 9,000 January 55 calls also for $0.55. The volume at both of those strikes was above open interest, indicating new activity.
The trader appears to be buying back short calls in December to close that position before it expires at the end of this week. The investor is now opening a bearish combination spread in January, which could be an outright bearish play but is more likely the collar of a long position in CTRP. (See our Education section)
The stock is up fractionally to $48.09 this afternoon. The Chinese travel service was at a high of $61.09 in early October but has been trading in a tight range for the last three weeks.
More than 28,000 CTRP options have change hands in all so far today, about 4 times its daily average for the last month.