Wellpoint (WLP, news, chart, volatility) is seeing double normal trading volume, with put buying dominating the day’s order flow. Shares of the managed healthcare company are down $2.46, or 6.1 percent, to $37.98 and 12,000 WLP puts have traded, almost four times the number of call options. October 35 puts are the most actives, with more than 3,000 traded and 85 percent trading offerside. Another 2,100 November 40 puts traded, with 92 percent trading on the offer. Volume exceeds open interest in both contracts, suggesting opening buy orders. Implied volatility is up to 87, up from 62 the day before. The big spike in implied vols and jump in put volume seems to suggest that some investors are worried about the risk of additional weakness in Wellpoint shares.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.