One investor likes Time Warner Cable and doesn’t want to wait for a pullback to get long.
optionMONSTER’s market scanners detected the sale of 5,750 January 90 puts for $0.90 and $0.95. Volume was more than 15 times previous open interest at the strike.
There are two ways he or she can make money from the trade. One is that the cable operator’s stock remains above $90, in which case the puts will expire worthless and the trader will keep the credit already earned as profit.
Alternatively, if shares pull back to $90, they now have a buy order in place. That level was resistance for most of August, which could make some chart watchers expect it to become support and therefore a good place to get long. The only way the trader will lose money is if the stock breaks significantly below $90.
— Option Monster