American Express Faces Bearish Trade

By David Russell

American Express (AXP) is down along with the rest of the market, giving one trader a chance to extend and enlarge a bearish bet against the credit card company.

optionMONSTER's Depth Charge monitoring system detected the purchase of 7,500 August 23 puts for $2.03 and $2.04, matched against the sale of 5,000 July 25 puts for $2.54. Volume exceeded open interest in the August strikes and was below open interest in the July strikes, suggesting that the investor replaced a bearish position in the front month with a larger position in the back month.

AXP is down 1.22 percent to $22.72 in midday trading, compared with drops of more than 2 percent for the Dow Jones Industrial Average and the S&P 500. The company has been edging lower for the last two months after spiking to $28.45 in early May following a better-than-expected earnings report on April 23.

The general tone of AXP trading is bearish so far Thursday, with puts outnumbering calls by 5 to 1. However, it's coming amid thin trading in the name, with stock and options volume at a fraction of normal levels.

(Chart courtesy of tradeMONSTER)