American Capital Limited (ACAS, news, chart, volatility) is down for a second day. Yesterday, the stock was downgraded after earnings and closed down 42.8 percent. Options volume jumped to 5 times normal, with November 7.5 put options topping the most actives. Some traders may have been positioned for the selloff because, rather than ‘panic’ buying of downside strikes, several thousand Nov 7.5 puts were sold for $1 in the early afternoon with shares near $8.03 Monday. Today, the stock is down another 88 cents to $6.99 and sentiment is mixed. Roughly 3,000 contracts traded, with volume scattered across November and December put and call options.
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.