Allot Communications Ltd. (NASDAQ:ALLT) – Shares in the provider of bandwidth consumption solutions fell more than 17% today to $16.62 after the stock was cut to ‘hold’ from ‘buy’ at Wunderlich Securities, and put activity on the name this morning suggests some traders are preparing for the price of the underlying to extend losses in the New Year. Options volume on Allot Communications is heaviest in the Jan. 2013 $17.5 strike put where some 670 contracts have changed hands versus open interest of 63 positions. It looks like the bulk of the volume was purchased for an average premium of $1.57 apiece, thus positioning put buyers to profit should Allot Communications Ltd. (NASDAQ:ALLT)’s shares decline another 9.5% from the current price of $17.66 to breach the average breakeven price of $15.93 at expiration next month.
United States Natural Gas Fund, LP (NYSEARCA:UNG) – Bearish put buying on the U.S. Natural Gas Fund this morning looks for shares in the Fund that tracks the performance of natural gas to continue to decline through the end of the trading week. United States Natural Gas Fund, LP (NYSEARCA:UNG) shares, down 10% since last Friday, slipped 2.1% lower this afternoon to stand at $18.93. Traders positioning for shares to extend losses tomorrow snapped up more than 5,000 puts at the Dec. 14 ‘12 $18.5 strike for an average premium of $0.05 apiece. Put buyers may profit at expiration should shares in the United States Natural Gas Fund, LP (NYSEARCA:UNG) drop 2.5% to settle below the breakeven price of $18.45. Interest is also building in the Dec. 14 ’12 $19 strike puts, with upwards of 3,700 contracts in play versus open interest of 938 positions. It looks like most of the $19 strike put options were purchased earlier in the session for an average premium of $0.20 per contract. Options traders purchasing these weekly puts lose the full amount of premium paid for the contracts should shares settle above $19.00 at expiration.
Equity Options Analyst
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