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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