Shares of Verizon Communications (VZ) are trading lower on the session by 1.22%, at $43.76. The stock has been moving lower over the past month following a spike to a fresh 52-week high in early October.
With shares breaking down through the 50-day moving average, one trader is going delta neutral. Shortly after the opening bell the April 2013 $40.00 put was purchased 10,000 times, on the offer, for $1.18 (21% vol); this trade coincided with the purchase of 300,000 shares of VZ common at $43.67 (purchased above the spread).
Given the delta of the Apr13 $40 put (~29), this looks like a delta neutral trade. Delta neutral trades profit from?large?movements in the underlying stock and increased?volatility?over the holding period.?
30-day implied volatility has popped 8.6% this morning to 20.24%, while 10-day implied volatility is registering 14.90%.
Verizon Communications Inc. is a holding company. The company is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies.