OptionsHouse

Options Trading News

December 26, 2012  Wed 9:34 AM CT

IDCC: SEE CHART GET CHAIN FIND STRATEGIES
InterDigital is down so far this month, and one investor thinks it may continue to drop.

optionMONSTER's Depth Charge tracking program detected the purchase of 2,000 January 41 puts against open interest of just 63 contracts. The initial blocks priced for $1.15, followed by the majority of the volume at $1.20 as the buying pushed up premiums.

Puts lock in the price where investors can sell shares in the technology company, which makes money by licensing wireless patents. If it falls those puts could appreciate in value, so they may have been purchased by an investor who owns the stock and wants protection against a push to the downside. (See our Education section)

IDCC is up 1.1 percent to $42.42 in morning trading. It rallied almost 90 percent between mid-June and mid-December but has been skidding lower since then. Given those big gains, some investors may now expect profit taking, which could help explain today's activity.

Total option volume is triple the daily average in the name, according to Depth Charge. Puts outnumber calls by a bearish 17-to-1 ratio.
Share this article with your friends


Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Investor deficiency in premium collection

Most investors have heard about selling options as a form of income generation. You hear it from brokers and financial advisors as a way to generate income without selling off pieces of your nest egg, dwindling through your retirement accounts, and then being stuck figuring out how to financially afford the rest of your life...

View more education articles »