Options Trading News

November 2, 2012  Fri 2:45 AM CT

Shares of Boingo Wireless have plummeted more than 40 percent in the last seven months, but one trader is betting that the stock will hold current levels.

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.
Share this article with your friends

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Options Academy: More on the Covered Call Strategy

Last week, we talked about the Covered Call and the misconceptions that surround it. We spoke about how an investor must realize that the Covered Call is actually a premium collection strategy and not so much a directional one. If an investor can grasp this idea, the investor stands to do a heck of a lot better in the strategy than they currently do.

View more education articles »