SNE – Sony Corporation – The manufacturer of consumer electronics attracted the attention of bears in morning trading with the price of its shares edging 0.20% lower to $28.27 just after 11:20 am (ET). Pessimistic options players appear to be bracing for continue erosion in the price of the underlying stock by purchasing 2,000 puts at the October $27.5 strike for an average premium of $2.07 apiece. Investors long the puts make money if Sony’s shares plunge 10% from the current price to breach the average breakeven point to the downside at $25.43 by expiration day in October. The electronics maker’s shares have take a beating over the past couple of months and are currently trading 30.1% lower than its 52-week high of $40.45 attained on March 23, 2010. The put buying interest observed on the stock today suggests investors see the Sony’s shares heading further south. Although, Sony’s shares have not traded below the average breakeven price of $25.43 since July 29, 2009.
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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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