Heavy Put Buying on Altria Group (MO)

Source from:  Benzinga.com 06/13/2010

Shares of Altria Group are higher on the session by 1.85%, currently trading at $20.42. The stock has been a relative outperformer as of late and has managed to hang onto the 200-day moving average. Options traders are picking up puts on the name today, but it does not appear to be bearish in nature. The July $20 put was bought in large blocks most of the morning; volume is totaling nearly 15,000 right now, open interest on the strike is only 11,279. Because this influx of put buying (put buying very near the actual trade price of the stock) is coinciding with a strong rally, it appears that traders are buying stock and then buying hedges on their positions. This type of trade effectively equals a long call and is bullish for the name. Altria Group, Inc. is a holding company. As of December 31, 2009, Altria Group, Inc.'s wholly owned subsidiaries included Philip Morris USA Inc., which is engaged in the manufacture and sale of cigarettes and certain smokeless products in the United States; UST LLC, which through its subsidiaries is engaged in the manufacture and sale of smokeless products and wine, and John Middleton Co. (Middleton), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco. Enditem