Cisco Systems rose with huge call buying yesterday, and today traders are betting that the stock will hold current levels.
CSCO is pulling back a bit today, down 1.34 percent at $19.46. Yesterday marked its highest close since May 3, days before the stock fell below $17. Shares touched 2012 lows at $15 at the end of July but gapped higher on positive earnings results three weeks ago.
More than 10,000 September 19.50 puts have been sold, with a block of 6,384 going for the bid price of $0.22, according to optionMONSTER's systems. The previous open interest was just 243 contracts, so this is a new position.
The put selling is a bet that CSCO will hold its current levels through that expiration. Traders may also be looking to buy shares if they are below that strike price, as the effective price would be $19.28. If the stock runs higher, they would collect the premium as profit. (See our Education section)
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