Market News

October 12, 2016  Wed 6:14 AM CT

XPO Logistics has surged in recent months, but one trader is positioning for a possible drop.

optionMONSTER's tracking program detected the purchase of 4,000 November 38 puts in one print for $3.06 to $3.30 yesterday. Volume was more than 10 times the open interest in the strike, showing that this is a new position.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

XPO fell 2.09 percent to $36.59 yesterday but is up 38 percent in the last three months. The transportation-logistics company is scheduled to report earnings after the close on Nov. 2.

Overall option volume was 8 times greater than average in the name yesterday. Puts outnumbered calls by a bearish 39-to-1 ratio.

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