One investor wants protection before Ross Stores reports earnings tonight.
optionMONSTER’s Depth Charge monitoring program detected the purchase of 1,810 March 70 puts for $1.40. Equal amounts of the March 65 puts and the March 75 calls were sold for $0.25 and $0.90 respectively. Volume was more than triple the previous open interest in all three strikes, indicating that new positions were implemented.
The trader paid $0.25 and will collect $5 if the discount retailer falls to $65 or lower by expiration three weeks from tomorrow. He or she is also effectively short shares if ROST rises above $75, so the strategy is probably being used as a hedge on an existing long position in the stock.
— Option Monster