Options Intelligence Report: Trina Solar Limited (TSL) & NutriSystem, Inc. (NTRI)
TSL ñ Trina Solar Limited
A sold strangle established on the China-based manufacturer of integrated solar-power products today suggests one investor expects TSL-shares to remain range-bound through March expiration. Trinaís shares increased 1.75% during the session to $22.94.
The strangle seller shed 8,000 put options at the March $20.5 strike for a premium of $0.55 each in combination with the sale of 8,000 calls at the higher March $24.5 strike for $0.35 apiece. The trader pockets a gross premium of $0.90 per contract, which he keeps as long as shares of the underlying stock trade within the $20.50 to $24.50 range through expiration day.
The short position acquired in both calls and puts exposes the investor to losses should shares trade above the upper breakeven price of $25.40, or if shares fall below the lower breakeven point at $19.60, ahead of March expiration. The nature of short strangles indicates the trader anticipates decreased volatility in the price of the underlying stock in the next few weeks. Options implied volatility on TSL is currently down 5.40% to 60.35%.
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TRI ñ NutriSystem, Inc.
Near-term bearish options trading patterns emerged on weight-loss management products firm, NutriSystem, Inc., today as shares plummeted 15.25% to $16.02. NTRIís share price slim-down follows the companyís disappointing first-quarter profit forecast. NutriSystem expects to earn $0.10 to $0.13 per share in the first quarter due to higher advertising costs and weaker sales. The firmís forecast is disappointing to analysts expecting earnings of $0.54 a share.
Bearish traders sold approximately 1,000 calls at the March $17.5 strike for a premium of $0.33 per contract. Call-sellers keep the full premium received if NTRIís shares trade below $17.50 through expiration in a couple of weeks. Pessimism spread to the March $16 strike where investors picked up 1,000 puts for an average premium of $0.71 each. Put-buyers are positioned to amass profits should the stock trade under the effective breakeven point at $15.29 ahead of expiration.
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