The number of puts with a September expiry is so far above the average number of puts with other expiry dates that the smell of insider info is overwhelming. From my earlier post (#421576):
"I figure the average open interest in March puts is about 300, in April it is 29(!), in June it is just over 100. Sep 70's open interest is a mind-boggling 2170!"
For the seller of these puts, the logic is normal. He/she would not mind buying the stock at $70, and in the meantime, he enjoys the premium. The suspicion of insider info is on the buyer side. If an investor wants to buy protection against the possibility of a decline, he/she would spread the expiration dates. Fixing the expiration date six+ months away is expensive.
So what is supposed to transpire in the Aug-Sep time frame?
LEGAL: The legal landscape is complex, and to tie a particular event to a date is fraught with risk.
EARNINGS: Second quarter earnings are typically released in July, and there are no puts available with an August expiration.
ACQUISITIONS/MERGERS: Again, the announcement date is extremely unpredictable, even if one were privy to ongoing discussions.
My bet is that somebody expects 2nd quarter earnings to be a dud. Alternatively, somebody got spooked by the $10 drop in SP from Feb 15 to Feb 22. On Feb 22, the $70 puts were probably fairly cheap (today they are trading at between $5 and $6) and the September expiry was selected for protection over several months.
Alternatively, somebody with a significant exposure (Vegas comes to mind) decided to hedge his/her position.
jmo
LA
