Laredo Petroleum seen on solid ground
A large trader is betting that downside potential will be limited in Laredo Petroleum.
optionMONSTER's tracking programs detected the sale of 5,000 August 10 puts in one print for $0.65 today. This is clearly a new position, as open interest in the strike was a mere 82 contracts before the trade occurred.
Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think that the risk of a big drop is limited. (See our Education section)
LPI is down 2.65 percent to $10.85 near midday trading but is up 10 percent in the last three months. The energy producer is expected to announce quarterly results in pre-market hours on Aug. 4.
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