Put seller bets Boingo will stop sliding
Mike Yamamoto | firstname.lastname@example.org
optionMONSTER's detected the sale of 3,000 February 7.50 puts in less than 2 minutes yesterday, dominated by a single print of 2,755 that went for $0.80. There was no open interest in the strike before the trade, so this is a new position.
WIFI rose 3.55 percent yesterday to close at $7.58. The wireless carrier gapped down from $9 on Aug. 9 after its last quarterly report, hitting a 52-week low of $6.51 that day. The stock, which was above $13 in late March, has been trading sideways with its 50-day moving average for the last two weeks.
Yesterday's put seller is betting that the stock will close above the $7.50 strike price at expiration in mid-April 2013. If WIFI is below that level, the trader faces the requirement to buy shares at an effective price of $6.70 once the credit from the put sale is factored in. (See our Education section)
Boingo is scheduled to release third-quarter results next Thursday after the close.