Puts Sold in MBIA

Shares of MBIA MBI are dropping like a rock this morning, off by 9.22% to $8.47 after the company reported a heavy loss on a credit-derivative position. The stock is still trading above the 50-day and 200-day moving average though; it remains to be seen if the stock will find support around those levels ($8 and $6, respectively). Options action in MBIA is suggesting that downside in the name is overdone with 50,000 of the June $7 put sold for $0.50. Open interest on this line is 50,364 contracts, which suggests that a position was closed in the name.