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New York Times Trader Buys $600,000 Hedge Before Earnings Report

A trader paid $600,000 to protect against losses in New York Times Co. (NYT) shares yesterday ahead of the newspaper publishing company’s earnings report next week.

Some 10,000 puts to sell shares of Times Co. at $10 by January changed hands yesterday. The options traded at the ask price of 60 cents and exceeded open interest of 1,105 outstanding contracts from Oct. 17, indicating a buyer of a new bearish position initiated the transaction. The shares rose 2.8 percent this week.

“My guess is that someone bought a diaper for their stock position ahead of earnings next week or a weekend meltdown,” Chris Rich, head options strategist at JonesTrading Institutional Services LLC in Chicago, said in an interview.

The publisher of the third-biggest U.S. newspaper by weekday circulation is working to increase its digital expertise and has accelerated a shift to the Internet as print advertising declines. In August, Times Co. named former British Broadcasting Corp. director Mark Thompson as chief executive officer to help lead the electronic push.

The company, which reports results on Oct. 25, may post quarterly earnings of 8 cents a share excluding some items from 5 cents a share a year ago, according to analyst estimates compiled by Bloomberg.

Robert Christie, a spokesman for the Times Co., declined to comment on the options trading.

To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net; Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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