Option update: Merrill Lynch out-of-money April puts active as downside hedge


Merrill Lynch (NYSE: MER) is recently down 31 cents to $46.32.

MER call option volume of 16,496 contracts compares to put volume of 49,275 contracts. MER April 30 puts ($16 out of the money) have traded 191 times on transaction volume of 20,899 contracts, above its open interest of 19,719 contracts.

MER April option implied volatility of 70 is above its 26-week average of 46 according to Track Data, suggesting hedging for downside risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Last updated: February 13, 2012: 01:49 PM

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