Market News

November 30, 2016  Wed 9:51 AM CT

Traders are preparing for a possible drop in Weight Watchers by early next year.

OptionMonster's market scanner shows that 3,300 January 11 puts were purchased mostly for $0.90 to $0.95 today. This represents fresh buying, as volume was more than 5 times the open interest in the 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)

WTW is down 2.24 percent to $10.80 in morning trading but is up 9 percent in the last month. The weight-loss company's next quarterly results are expected after the close on Feb. 23.

Overall option volume in the name is twice its daily average so far today. Puts outnumber calls by a bearish 605-to-1 ratio.

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