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Rubbermaid Puts Active Ahead of Earnings

Shares in Newell Rubbermaid are moving lower this morning amid a down day for U.S. stocks. The consumer products company’s shares declined as much as 2.2% during the first half of the session to $30.28, the lowest level since December 5th. Options volume on the stock is well above average today, with more than 2,100 contracts in play versus an average daily reading for NWL of roughly 230 contracts.

Most of the trading traffic in NWL options is in February expiry puts, driving the put/call ratio on the stock to 43.5 as of the time of this writing. The Feb $30 strike puts are the most traded contracts on Newell, with more than 1,500 lots in play against open interest of 368 contracts. Time and sales data suggests most of the puts were purchased at a premium of $0.60 apiece during the first 30 minutes of the session.

Put buyers may be bracing for the price of the underlying to extend losses at the end of the week after the company reports fourth-quarter earnings prior to the opening bell on Friday. The put position may be profitable at expiration next month if shares in NWL drop more than 4.0% from the current price of $30.67 to trade below the average breakeven point at $29.40. Shares in NWL last traded below $29.40 in mid-November. 


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