"OptionSmith has a bullish position in EMC, and this name had been a rumored takeover candidate all of 3 weeks ago."
But now the option action is taking on a much more bearish tone ahead of Thursday’s earnings report. So far, over 15,000 puts have traded, compared to less than 2,500 calls. The most active strikes are the May $10/11/12s, in which it looks like someone bought the butterfly 3,000 times for $0.20 net debit. The position achieves a maximum profit of $0.80 if shares decline to $11 on expiration.
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