3D Systems (DDD) notched new 52-week highs this morning, but then faltered and is down $2.72 to $57.95 on heavy volume of 3.1 million shares. Options action is running 3X the daily average, being led by a deep out-of-the-money May 35 – 45 put spread for $1.84, 1800X. The May 35 and 45 puts are already the largest open interest positions in the name, as the same spread was bought for $1.74, 6000X, to open yesterday. Therefore, 7800 have been opened over the past two days and, if bought for $1.80, the downside breakeven of the spread at expiration is at $43.20, or 14.7 percent below current levels over the next 129 days. The negative reaction in the stock today comes after the company demos new products at the CES conference.
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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.