Bears Shopping at General Growth

Apr.16.10 | About: General Growth (GGP)

By Chris McKhann

The improbable run of General Growth Properties' (NYSE:GGP) stock appears to be hitting a plateau, and option trading has turned bearish on the bankrupt mall owner.

GGP Chart

GGP fell 2.26 percent yesterday, finishing the session at $16.01, which has been a support level for the last month. The shares, which were down at $0.50 a year ago, hit a high of $17.28 in late March but have been unable to get back above $17 since. The company has been the subject of a bidding war for months and has rejected various potential suitors.

Traders were most interested in the May 12.5 contracts, where almost 9,000 puts changed hands against open interest of 2,273 contracts. Most of those puts were bought, with one block of 7,000 picked up for $0.25.

This put buying is a bet that shares will fall back to where they were two months ago when the price gapped up from $9 to $12. It could also be a protective hedge against existing long shares, but the option activity was not clearly tied to any trades in the stock yesterday.

Disclosure: No positions