Bearish options on Vail Resorts pay off for some traders as shares slide

Vail Resorts, Inc. (NYSE:MTN) – Shares in ski resort operator, Vail Resorts, Inc. (NYSE:MTN), dropped sharply on Tuesday after the company posted a larger-than-expected first-quarter loss and warned it may miss its projected earnings target for the year. The stock currently trades down 9.2% on the day at $50.70 as of 11:00 a.m. in New York, the lowest level since August. Rising open interest levels and a review of time and sales data for transactions in Vail Resorts, Inc. (NYSE:MTN) front-month put options on Monday indicates some strategists were anticipating the stock may pullback after earnings. Bearish players appear to have purchased around 200 puts at the Dec. $52.5 strike for an average premium of $0.65 each and more than 350 put options at the Dec. $55 strike at an average premium of $1.48 apiece. Traders prepared for Vail Resorts, Inc. (NYSE:MTN) to hit an icy patch find the value of their contracts have more than tripled overnight, with premium on the $52.5 and $55 strike contracts rising to $2.50 and $4.60 apiece, respectively, as of 11:15 a.m. ET on Tuesday morning. Finally, traders also appear to be selling upside calls on Vail, with around 225 of the Dec. $57.5 strike calls hitting the bid price of $0.05 in the early going.

Tripadvisor Inc (NASDAQ:TRIP) – Shares in online travel company, Tripadvisor Inc (NASDAQ:TRIP), are on the decline today, trading down 3.75% at $36.28 as of 11:30 a.m. ET. Upside call buying on the stock, however, suggests some strategists are positioning for the price of the underlying to rebound ahead of December expiration. Options volume on Tripadvisor Inc (NASDAQ:TRIP) today is greatest in the front month calls, with heavy trading traffic in the $38 and $39 strike contracts. Traders exchanged some 1,400 call options at the Dec. $38 strike and another 1,100 lots at the higher Dec. $39 strike. It looks like most of these calls were purchased earlier in the trading session at average premiums of $0.65 and $0.40 apiece, respectively. Traders long the $38 strike calls stand ready to profit at expiration in the event that TRIP’s shares rally at least 6.5% over the current price of $36.28 to surpass the average breakeven point at $38.65, while buyers of the $39 strike calls require a minimum 8.6% upside move in the stock price in order to breakeven at $39.40 by December expiration. Tripadvisor Inc (NASDAQ:TRIP) shares are down more than 30% off a 52-week high of $47.81, but are up nearly 40% since the start of 2012. Options volume in excess of 4,800 contracts before midday on Tripadvisor Inc (NASDAQ:TRIP) is noteworthy given the stock’s average daily options volume of around 1,860 contracts.