Massive Volume In Ares Capital Recently (ARCC and July 12.5 Puts)

I checked out Ares Capital ($ARCC), a Business Development Company (BDC) or publicly traded private equity/debt firm, and saw interesting volume in both the stock and puts recently. Like the Leveraged Loan Index and high yield bonds ($HYG), ARCC has had a huge run off its 2009 low (up 5 fold).

I saw that 25 million shares traded a few days ago in the stock. Was there a corporate event involved? I couldn't find anything. I then looked at the option chain and saw that 10,685 July $12.5 Puts were open (8,191 puts traded at $0.30 on 6/24 and $1,843 traded at $0.40 on 6/25, same day as the 25 million shares). Today ARCC closed at $12.53, just above the the put strike.

I found a great article on the put action at The Options Insider called:  Ares Capital (ARCC) - Huge Downside Put Buyer on "Mezzanine Debt" Holder. The author mentioned that an institution could be hedging. Something is up. Watch downtrend resistance and the $12.50 level. For more information I found a blog that tracks the BDC industry.

ARCC (Ares Capital) -


  1. Re: The Ares corporate event

    Ares Capital Corporation Completes Merger with Allied Capital Corporation

    Ares Capital Corporation Announces Shareholder Approval for the Issuance of Shares in Connection with Allied Capital Merger

    ARES CAPITAL CORPORATION Acquisition of Allied Capital Investor Presentation
    March 3, 2010


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