Dec. 20 at 5:12 PM
$CRM There was some very unusual option activity on Friday. 3 large DEEP in the money put trades were crossed at 1:38pm by a dealer, totaling 13,000 contracts (1.3 million shares =
$338 million). At the 300 strike, 310 strike and 320 strike. While the stock was trading at
$258.30 at the time, the prices of the options were
$41.10,
$51.10 and
$61.10 signaling it was a SALE at the bid. The fact the stock sold down quickly right before the crosses means a dealer was hedging the puts sold to them by shorting the stock in advance (at higher average prices), then crossed the puts. These were newly created puts and a planned trade.
This is a VERY bullish trade. Instead of purchasing shares , a fund sold in the money puts as a way to purchase shares cheaper by selling a little bit of premium and earning interest at the same time on the premium. If it was a hedge fund, the capital requirement is also lower by the premium amount (
$41 to
$61 per share).
The stock bounced immediately after the cross
