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November 28, 2016  Mon 9:08 AM CT

A large trader apparently believes that there is a floor in shares of PayPal.

OptionMonster's tracking programs show that 4,822 Weekly 40 puts expiring on Friday were sold for $0.23 at the same second today. This is clearly a new position, as open interest in the strike was only 539 contracts before the trade appeared.

Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think the risk of a big drop is limited. (See our Education section.)

PYPL is off 0.25 percent to $40.16 in morning trading but is up 7 percent in the last three months. The online-payment service is expected to report earnings in pre-market hours on Jan. 26.

Overall option volume is about average in PYPL so far today.

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From the AP Archives: If It's Not There...

I have talked at great length about the fact that as an individual investor, you do not have to be in the market at all times.

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