Options Trading News

September 16, 2016  Fri 6:14 AM CT


A large trade is positioning for more potential declines in Mead Johnson Nutrition, which has dropped sharply in recent weeks.

optionMONSTER's monitoring program shows that 3,000 October 77.50 puts were sold for $2.25 while 3,000 October 70 puts were purchased for $1.40 yesterday. Volume was below open interest in the higher contracts, indicating that the trader is taking some money off the table and rolling a bearish position to a lower strike.

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)

MJN rose 0.31 percent to $77.29 yesterday but is down 13 percent in the last month. The manufacturer of infant formula is expected to report earnings in pre-market hours on Oct. 27.

Overall option volume in the name was 3 times greater than average yesterday. Puts outnumbered calls by a bearish 48-to-1 ratio.

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