Yahoo is down more than 5 percent amid questions over the direction of its new CEO, but traders apparently believe that a key support level will hold.
More than 9,000 September 15 puts were sold at bid prices ranging from $0.31 to $0.38 against existing open interest of 5,507 contracts, according to optionMONSTER's tracking systems. The trades pushed total option volume in the name to double its daily average.
These put sellers are betting that YHOO will be above the $15 strike price at the time the September options expire in six weeks. The traders face the possibility of having to buy the shares if they are below that level. (See our Education section)
The Internet stock has held support around that $15 price since mid-April. YHOO is lower by 5.15 percent at $15.19 this morning.
The stock had been working its way higher with this month's broad market rallies but fell after Yahoo management said late yesterday that might shift direction on some key points under new CEO Marissa Mayer. Perhaps the most controversial issue was the possibility that investors might not receive proceeds from the sale of Yahoo's stake in Chinese e-commerce company Alibaba.
Bank of America / Merrill Lynch downgraded YHOO to "neutral" from "buy" this morning.
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