A large put trade is betting that shares of Kellogg will fall.
optionMONSTER’s Depth Charge system shows that 5,000 December 67.50 puts were sold for the bid price of $4.10 against previous open interest of 6,159 contracts. Seconds later, 7,500 January 65 puts were purchased for the ask price of $2.55 in volume above open interest of 2,066 in that strike, so it is a new position.
The trader is rolling the December puts forward by a month to a lower strike while increasing the size of the position. The trader is taking some profits off the table and remains positioned for further gains if the stock falls. This is an outright bearish play, rather than hedging, because the new puts remain in the money.
— Option Monster