Options Play: Gannett Could Fall Even Farther

Gannett has been running out of gas since rallying in July, and now at least one bear expects the newspaper stock decline further over the next six weeks.

OptionMonster's tracking systemsdetected unusual activity in the October 7.50 puts, which traded 7,750 times against open interest of 5,938 contracts. A series of simultaneous trades at $0.75 accounted for almost all the activity in the strike, suggesting a purchase by a large institutional investor.

GCI, which is up 1.13 percent to $8.04 in midday trading, has fallen 12 percent in the last five sessions after a 96 percent gain during July. GCI's reported a better-than-expected second-quarter profit on July 15 but mainly because of cost cutting.

The stock needs to decline about 16 percent by October expiration for today's puts to turn a profit. GCI fell on heavy volume in the seconds following the options trade, suggesting the dealer sold the stock to hedge long exposure to the name after selling the puts.

Puts in GCI outnumbered calls by more than 250 to 1, reflecting the bearish sentiment in the name. On a day when overall volume in the options market is less than half the average level, activity in GCI is almost twice its typical level.

Options Trading School:



David Russell is a reporter and writer for OptionMonster.