Why trader is selling puts in Coinstar
Mike Yamamoto | firstname.lastname@example.org
A single print of 2,000 December 45 puts was sold for $1.95, according to optionMONSTER's tracking systems. The volume was well above open interest of 366 contracts at the beginning of the day, so this is clearly a new position.
CSTR is up 1.68 percent to $47.76 this morning, breaking above its 50-day moving average for the first time since mid-July. The company, which operates the Redbox DVD-rental kiosks, missed forecasts in its quarterly report on Oct. 25 but announced a distribution deal with Warner Bros. at the same time.
Today's put seller is looking for CSTR to be above the $45 strike price by expiration in December. If it is below that level, the trader faces the prospect of buying shares at an effective price of $43.05 once the credit from the put sale is factored in. (See our Education section)