Options action turned bearish on Nokia Tuesday, as traders positioned for the cell phone maker to lose at least a quarter of its value.
Volume in the October 11 puts rose to 16,660 against open interest of 8,932 contracts, according to OptionMonster's monitoring systems. The puts traded for $0.30 to $0.35, with purchases accounting for most of the activity.
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NOK stock fell 3.26 percent to $14.52 in afternoon trading and has stayed mostly between $14 and $15.50 since the start of May. The puts bought today will turn a profit if the shares drop below $10.65.
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NOK received a negative headline today when BMO Capital Markets initiated the stock with an "underperform" rating, predicting the company will lower profit forecasts as customers flock to devices from rivals such as Research In Motion, which makes the BlackBerry.
Options volume in NOK was more than twice average today at 35,248 contracts, with puts outnumbering calls by almost 2 to 1.
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David Russell is a reporter and writer for OptionMonster.