Protection Bought on DFS Signaling Bullishness (DFS)

Shares of Discover Financial Services DFS are higher on the session by 1.74%, currently trading at $15.81. The stock has been moving largely higher over the past three months, accelerating the rally as of late. Note that the $16.00 level is strong resistance. Earlier in the session, one options trader purchased 2,500 September $15 puts for $0.30; while this would be bearish in isolation, this trade appears to be tied to long stock. At the same minute this options trade occurred, roughly 74,000 shares traded in the stock, namely buyers on the ask, which then put in the daily bottom for DFS. Given the delta of the put option of -0.2283, 57,075 shares would have to have been purchased to make the trade delta neutral. Therefore this was likely a long stock buyer buying protection against his or her new position as DFS nears resistance. stocks nearing resistance normally see an increase in volatility, which is what this trade thrives on. Put volume is running at 5.83x the daily average. Discover Financial Services is a credit card issuer in the United States and an electronic payment services company. The company offers credit cards, personal and student loans, and deposit products. For more great research like this, as well as how to play it through options…please visit Benzinga’s Options & Volatility Edge and Benzinga’s Cash Generator.