SWK – Stanley Black & Decker Inc. – Shares in the maker of power tools are getting hammered this morning, down nearly 16% to a three-month low of $75.44, after the company reported third-quarter revenue that missed analyst estimates and lowered its full-year 2013 earnings forecast.
Options traders snapping up put options on the stock straight out of the gate today appear to be bracing for shares in Stanley Black & Decker to extend losses during the next few months. More than 2,100 of the Jan 2014 $72.5 strike puts changed hands in the early going against open interest of just 258 contracts. It looks like most of the puts were purchased at an average premium of $2.50 each. Traders long the puts stand ready to profit at expiration next year in the event that SWK shares slide 7.0% from the morning low of $75.44 to breach the average breakeven point on the downside at $70.00.
