Vringo (VRGO), which surged 70 percent over the past two days on a positive ruling in a patent dispute with Google, is down 59 cents to $4.66 after an announcing a 10 million share offering of common stock. One player in the options market seems to be bracing for further losses in shares of the New York-based mobile app developer, as the Nov 4 – 5.5 bearish risk-reversal is being bought on ISE this morning, 15000X so far. The first 10,000 traded for a nickel and data from ISE indicate calls were sold to buy puts. A shareholder might have initiated the bearish combo to hedge, or “collar”, the recent gains in the underying stock.
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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.