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Options Trader Dumps This Plunging Bank Stock

UBS has been dropping like a rock, and one option trader is apparently getting nervous.

OptionMonster's tracking systems detected the purchase of 5,485 December 15 puts on Wednesday, mostly for $0.25. Volume was 9 times open interest in the strike.

UBS stock ended the session up 0.38 percent to $15.83, but only after testing a four-month low of $15.67. The put buying occurred after the stock probed that level, which was also below its 200-day moving average — a key support area.

The Swiss bank has been falling since Oct. 26, when it reported a stunning drop in investment-banking business. It rebounded briefly from that decline, made a lower high, and then plunged.

Wednesday's put buying reflects fear that UBS will break support at its 200-day moving average and head toward $15.

The trade pushed total option volume in the name to 10 times greater than average, with puts accounting for more than 90 percent of the activity.

Disclosures:

Russell does not hold significant numbers of shares in UBS.

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Options Trading School:

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UBS' Peers and Rivals Now:

HSBC

Citigroup

JPMorgan Chase

Banco Santander

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David Russell is a reporter and writer for OptionMonster.

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Disclaimer

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