Puts Active as Philip Morris Pushes to New Highs (PM)

Shares of Philip Morris International (PM) are trading higher on the session by 0.56%, at $93.83. The stock touched a fresh 52-week and all-time high earlier in the session when it hit $94.03.

With PM now trading above the $93.60 resistance level, as well as with upward sloping 20-day, 50-day, and 200-day moving averages, the stock could easily form another medium-term upside leg.

While the allure of further upside is there, one trader is taking the opportunity to purchase downside puts on the name today. A short while ago, an institutional trader purchased 13,941 October $87.50 puts, on the offer, for $0.14. Total volume on the strike is now over 18,000 contracts; open interest is just 3,411. 

This could be naked long positioning, which would voice a bearish opinion on the name, or this could be a hedge to current long shares with the trader paying a nominally cheap price to protect a sizable chunk of stock.

Overall implied and historical volatility is registering 15% and 19%, respectively. At $0.14, the Oct $87.50 put traded at 23% vol.

Philip Morris International Inc. is a holding company. PMI's subsidiaries and affiliates and their licensees are engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States of America. Its products are sold in approximately 180 countries. 

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.