NTGR – NetGear, Inc. – The maker of networking products for home users and small businesses popped up on our ‘hot by options volume’ market scanner this morning after one bearish player took action in July contract put options. Netgear’s shares fell 0.60% today to stand at $18.89 as of 11:25 am (ET), but the price of the underlying is down 34.7% overall since reaching an intraday high of $28.96 on April 26. One options strategist was prepared to benefit from Netgear’s pain, having purchased 1,250 puts at the July $22.5 strike for a premium of $1.85 each back on June 17, he today sold the puts for a richer premium of $3.70 per contract. Net profits enjoyed by the investor amount to $1.85 per contract. The same investor also extended bearish sentiment on Netgear today by purchasing 1,250 fresh in-the-money puts at the lower July $20 strike for a premium of $1.60 each. The put player starts to make money on the new position if Netgear’s shares trade below the effective breakeven price of $18.40 ahead of July expiration day.
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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