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July 24, 2013  Wed 3:47 AM CT

SYY: SEE CHART GET CHAIN FIND STRATEGIES
Sysco saw large put activity for the second session in a row yesterday.

On Monday traders were rolling August 34 puts to the August 35 strike, and yesterday they were purchasing the August 36 puts, according to optionMONSTER's Depth Charge system. More than 6,000 of the latter traded in a heavy buying pattern for $0.65 to $1. The volume at that strike was far above its previous open interest of just 351 contracts, clearly showing that these are new positions.

These options, which lock in the price where traders can sell the stock no matter how far it might fall, can be used to hedge a long position or to make an outright bearish bet. The puts bought yesterday will track the share price closely because they are in the money and will expire worthless if the stock is above the $36 strike price in mid-August. (See our Education section)

SYY fell 0.64 percent yesterday to close at $35.51, a day after peaking at $36.05. That was the first time the stock breached the $36 mark since January 2007, but traders may believe that the food-service company will face resistance at long-term highs.

Total option volume in the name topped 8,800 contracts yesterday, more than quadruple its daily average for the last month. Overall calls outnumbered puts by 7 to 1.
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