Andrea Kramer (akramer@sir-inc.com) Put activity on Corinthian Colleges, Inc. (COCO) has picked up steam today, with traders preparing their portfolios for the expiration of front-month options after the closing bell. So far, the for-profit education issue has seen about 9,800 puts cross the tape ? nearly 20 times its predicted daily put volume, and close to 21 times the number of COCO calls exchanged.
Digging deeper into the data, it appears that almost all of today's put activity is attributable to a pre-expiration roll-out. More specifically, COCO's in-the-money December 5 put and near-the-money May 4.50 put have each seen more than 4,600 contracts traded, most of which changed hands via symmetrical blocks marked "spread." While the soon-to-expire December-dated puts traded at the bid price, the longer-term puts crossed at the ask price, suggesting that the trader is likely cashing in his winning near-term puts and buying slightly more aggressive, longer-term puts.
Sentimentally speaking, though, bearish bets are relatively rare for COCO. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.38 stands at an annual nadir, implying that short-term speculators haven't been more optimistically aligned toward the stock at any other time during the past year. However, considering the equity's elevated short-to-float ratio of nearly 33%, the preponderance of near-term calls could be related to hedging activity among short sellers.
In early afternoon trading, the shares of COCO have added 1.4% to flirt with the $4.40 level.
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