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May 7, 2012  Mon 9:36 AM CT

CTRP: SEE CHART GET CHAIN FIND STRATEGIES
Puts are dominating the option activity in Ctrip.com today as it trades just off Friday's lows.

CTRP is up $0.03 to $19.94 after trading down to $19.44 during the previous session. Shares of the Chinese travel-service provider were above $22 two weeks ago and $28 two months ago.

Almost 5,000 CTRP options have traded so far this morning, compared to an average of 2,500. Almost all of the action is in one put spread.

A trader sold, 2,440 May 23 puts for $3.24 against open interest of 10,447 while buying 2,440 May 21 puts for $1.69, according to optionMONSTER's Depth Charge system. Volume at the latter strike was twice the open interest and therefore a new position.

This could be a put credit spread, which would look for the stock to be above $23 by expiration. But it is far more likely that the trader is rolling the position down from the May 23 contracs to the 21s, taking profits but still holding in-the-money puts to take advantage of more downside. (See our Education section)
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