The bears are targeting Yum Brands.
optionMONSTER's Depth Charge monitoring program shows that 3,600 Weekly 71.50 puts expiring this Friday, Jan. 8, were purchased for $1.44 to $1.65 today. Volume was more than 28 times open interest at the strike, which indicates that new money was put to work.
Long puts lock in the price where a stock can be sold, so they make money to the downside. Investors use them to hedge long positions or to speculate on a drop. (See our Coaching section)
YUM is down 2.74 percent to $71.05 in morning trading and has fallen 9 percent in the last three months. The casual-dining company, whose chains include KFC and Taco Bell, operates extensively in China. It reported bearish quarterly results on Oct. 6, and the next earnings report is estimated for Feb. 3.
Overall option volume was about average in YUM so far today. Puts outnumbered calls by a bearish 9-to-1 ratio, according to the Depth Charge.
More From optionMONSTER