Trade looks for big move in Pretium
Chris McKhann | firstname.lastname@example.org
optionMONSTER systems show that a trader was buying March 2.50 puts yesterday, paying $0.60 for large blocks adding up to 15,500. This is clearly a new position, as open interest in the strike was a mere 70 contracts before the trade appeared.
Shortly afterward, a block of 286,000 shares was bought for $3.68. The combination of stock and puts creates a delta-neutral play that would profit from higher volatility than that implied by the options, rather than a specific directional move. (See our Education section)
PVG lost 3.01 percent yesterday to close at $3.54. The Canadian company was above $10 in late August but hit a lifetime low of $3.04 last week.
Overall option volume in the name was 16,513, topping the total open interest and eclipsing the daily average of 648 contracts.