Frontier Communications drew a large bearish trade yesterday ahead of its earnings report early next month.
optionMONSTER's Depth Charge system detected the purchase of 10,000 February 6 puts for $0.55 yesterday. The volume was well above the strike's previous open interest of 6,400 contracts, showing that this is a new position.
These puts lock in the price where the stock can be sold no matter how far it might fall through expiration in mid-February. The trade could an outright bearish bet or a hedge to protect a long position. (See our Education section)
FTR fell 4.51 percent to $5.93 yesterday. The telecom carrier gapped up from below $6 on restructuring speculation in late July but has given back all those gains. Frontier is scheduled to release third-quarter results on Nov. 3 after the close.
Total volume in the name reached 12,331 yesterday, more than 8 times its daily average for the last month. Only 624 of those contracts were calls.
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