Automatic Data Processing Inc. (ADP) does outsourced human resource, payroll, tax and benefits administration services for companies.
One might think that business at ADP would be stressed by rising unemployment. Yet, the stock is only down about 3% for the year and has outperformed the broader market since last October.
Option investors are betting ADP’s outperformance may end by February expiration; they have purchased 16,000 ADP Feb 32.50 Puts (ADPNZ) and almost another 5,000 ADP Feb 35 Puts (ADPNG).
Clearly, these option investors believe the steady performance of the stock is about to end. The company is scheduled to report on Feb. 3.
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