Option Activity Alert: Equinix, Inc.

EQIX – Equinix, Inc. – The provider of global data center services appeared on our ‘hot by options volume’ market scanner in afternoon trading after one options investor initiated a bearish put spread on the stock in the December contract. EQIX shares are currently up 0.60% to stand at $102.95 as of 3:15 pm ET. The put spreader may be building up the pessimistic play as a hedge against the firm’s third-quarter earnings report scheduled for October 21 after the close. The trader purchased 4,168 puts at the December $100 strike for premium of $4.90 each, and sold 4,168 puts at the lower December $90 strike at a premium of $1.85 apiece. The net cost of the transaction amounts to $3.05 per contract, thus positioning the trader to profit should EQIX shares fall 5.80% from the current price to slip beneath the effective breakeven point to the downside at $96.95 by expiration day in the final month of 2010. Maximum potential profits of $6.95 per contract are available to the investor should shares plummet 12.6% to trade below $90.00 by December expiration.

About Andrew Wilkinson 1023 Articles

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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