International Paper Company (IP) is a paper and packaging manufacturer with operations around the world. The company’s stock is currently trading around $51.70 and is down nearly 3.8% on the session. The stock has been relatively flat this year with shares down by roughly 3.8% year to date. IP has been trading in a 52 week range of $44.50-$57.90. IP is sharply lower today but there was some very interesting options activity earlier in the session that telegraphed the move perfectly.

Earlier this morning a trader bought 1,029 IP May 8th Weekly 52 puts for $0.16 less than 10 minutes after the open. This is a rather large bet for weekly options and nearly 1,900 contracts have now traded on that line. Over 2x the average daily options volume has traded in IP today and the stock saw a big move lower after these puts were bought. Stock was trading at $53.49 when these puts were bought and sold off to session lows of $50.90 after they hit. These puts exploded in value as the stock continued to sell off and traded as high as $3.03 on the session meaning they increased in value by nearly 20x. This trade is a perfect example of an absolute blowout winner in unusual options activity.

Trade: A trader bought 1,029 IP May 8th Weekly 52 puts for $0.16.
Risk: $16 per 1 lot
Breakeven: $51.84

These puts traded as high as $3.03 on the session making this an extremely profitable trade. If a trader would have bought a 20 lot of these puts they would have profited $5,740 at the highs.

Andrew Keene

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