Investors want protection in Altera, which is back to the top of its long-term range.
optionMONSTER's monitoring systems detected the purchase of 2,750 June 35 puts for $1.73 and the sale of an equal number of January 35 puts for $0.08. Volume was below open interest in the nearer-dated contracts, which suggests an existing position was rolled forward in time.
Puts lock in the price where investors can sell a stock, which allows them to hold it with limited risk of loss. They can also be used to speculate on a drop, but Wednesday's trade was probably a hedge on long shares. (See our Education section.)
ALTR ended the session down 1.15 percent to $36.94. It surged 27 percent between mid-October and late December, traversing its entire range over the last 2-1/2 years. The stock has lagged the broader semiconductor sector despite results beating estimates for the four most recent quarters, and the investor probably wants protection as he or she waits for it to start rallying.
Total option volume was 5 times greater than average, with puts outnumbering calls by almost 7 to 1.
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