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By David Russell

Up or down, an investor in Weight Watchers International (NYSE:WTW) is sitting pretty, thanks to the power of options.WTW

Our Depth Charge tracking system detected the sale of 2,500 May 65 puts for $4.10 and the purchase of 7,500 May 60 puts for $2.25. Volume was more than 19 times open interest in the strike.

The trade is apparently a back-spread, on its face a highly bearish position that's looking for a big drop in the diet stock. However, it was probably the work of an investor using it as a hedge on a long position in the stock.

If WTW pushes below $65, they'll be obligated to buy more shares at that price -- something they may not mind doing if they like it long term. However, if it suffers a bigger collapse below $60, they'll make more money on the lower-strike puts because that position is 3 times larger.

The trade makes a lot of sense considering that WTW made a giant surge after a strong earnings report last month, gapping from the $44 level to over $60. Investors may want to own the shares around the current price, but also want protection in case they retrace some or all of that move.

It's down 1.33 percent to $64.12 in afternoon trading. Overall options volume in the name is 10 times greater than average so far today, with puts outnumbering calls by 18 to 1.

Source: Interesting Hedge on Weight Watchers