Options Intelligence Report: Focus Media Holding ADR (FMCN)

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FMCN ñ Focus Media Holding ADR 
Bear Play On Focus Media ADRs

In March shares at Focus Media, the Chinese out-of-home advertising media company were trading at below $5.00. Today, its shares are a little higher at $13.16, which leaves us at a loss to explain what looks like a rather large bearish position initiated using options expiring in April at the 5.0 strike. Shares would need to slide by 62% to reach the strike. The premium of 20 cents appears to have been paid today by one investor ñ we mused at first that this could be sold puts to take in a wasting premium, but the trade was executed to the asking price.




The trade covers about 2 million shares in the underlying with a $26.3 million face value. We donít currently see a catalyst on this trade although itís not impossible that this isnít married put protection against a long stock position. But why buy shares in a company you expect to fall so far? No, this looks like the work of someone who might knows the inner workings of Focus Media far better than we do. Option implied volatility is marginally higher at 715 today.

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