What's behind big put action in Annaly
Chris McKhann | firstname.lastname@example.org
NLY is up 0.8 percent to $16.60, on pace for its highest close since the end of February. Shares were $1 lower a month ago.
A trader bought 8,000 January 2014 8 puts for the ask price of $0.50, according to optionMONSTER's systems. There was no open interest at that strike previously, so this is a new position.
The put buying may be tied to NLY shares, as our systems detect large stock trades in the surrounding 20 minutes with several prints of more than 240,000. So there are a number of possible strategies behind today's puts, in the following order of likelihood: an outright bearish bet, a delta-neutral long volatility play, or a long-term hedge. (See our Education section)