Sarah Wasserman (swasserman@sir-inc.com) Put players sailed over to Diana Shipping Inc. (DSX) on Wednesday, with 1,350 of these bearishly oriented options changing hands on the session -- triple the transportation titan's expected daily put volume of fewer than 400 contracts.
Option players showed a preference for the back-month series, with DSX's February 12 put being the day's most heavily traded option. Nearly 500 contracts changed hands on this strike -- the majority of which traded at the ask price, suggesting that they were likely purchased. Open interest swelled by 367 contracts overnight, confirming that fresh bearish positions were added here. By buying to open the February 12 put, option players are betting on DSX to sink beneath the $12 level over the next two months.
In fact, DSX is currently trading around $11.90, so these 12-strike puts are just in the money. Technically speaking, the shipping issue has been sinking steadily lower during the past several weeks under the weight of its 10-day and 20-day moving averages. DSX has not closed a day above this duo since Dec. 2.
As a result, option players have adopted a skeptical attitude toward DSX, as illustrated by the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.82, which represents an annual bearish peak.
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