By David Russell
Sigma Designs (SIGM) is down more than 13 percent from its recent high, allowing one trader to take profits and maintain a bet against the semiconductor company.
optionMONSTER's Depth Charge monitoring system detected the sale of approximately 5,000 July 17.50 puts for $3.02 to $3.10 and the purchase of 6,000 July 15 puts for $1.05. Volume exceeded open interest in the 17.50 strikes and was below open interest in the 15 strikes, suggesting an investor replaced a position in the former with a position in the latter.
SIGM is down 6.78 percent to $14.30 in midday trading. The options action Monday may result from an investor with a long position in the shares adjusting his or her protective puts to recover premium after the stock declined. The next event that could serve as a catalyst for SIGM is its annual meeting on July 30.
Options volume in SIGM was about 15 times average today, with puts outnumbering calls by 3 to 1.
(Chart courtesy of tradeMONSTER)