Traders are turning bearish on Oracle today after antitrust concerns arose about its acquisition of Sun Microsystems, which is losing market share according to a new report.
Options activity is heaviest in the December 20 contracts, where more than 19,000 puts have changed hands in large blocks at nearly four times the open interest, according to OptionMonster's real-time systems. The options went for $0.90 and $0.95 in a strong buying pattern, dwarfing the average daily volume of just 89 puts at that strike.
ORCL is down 0.87 percent to $21.75 in midday trading. The database maker has been rising steadily since its March low of $13.80 but has been range-bound between about $20 and $22 for the last three months.
The stock fell in the immediate weeks after the Oracle announced plans to acquire Sun in April but then recovered. Today, however, ORCL fell after industry research IDC reported that Sun's share of the server market is down more than from the same period last year.
At the same time, Oracle is awaiting word from European Commission, which has been reviewing the merger and is scheduled to announce a decision tomorrow on either approving the deal or further investigation.
For today's put purchases to turn a profit, ORCL would need to drop more than 12 percent by the time the contracts expire in December.
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Mike Yamamoto is an analyst and writer for OptionMonster.