Traders were selling puts in Renren for the second session in a row yesterday.
On Wednesday a trader was selling July 5 puts, but yesterday the activity was in the October 4 contracts. A trader sold 10,000 of the October puts for the bid price of $0.65 at 4 times the open interest, indicating that it was a new position.
RENN gained 4.4 percent finish at $4.75 yesterday, a day after its lowest close since January. Shares of the Chinese social-networking company have trended lower in the last six weeks from above $7.50.
The put selling is a bet that RENN will remain above $4 through that October expiration. If the stock is below that level, the trader will be required to buy the shares if assigned, at an effective price would be $3.35. (See our Education section)
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