Banco Santander Brasil SA options
volume surged to a record in the U.S. after a single trade in
which an investor sold bearish contracts to bet that the
Brazilian unit of Spain’s biggest bank won’t extend its 25
percent slide over the past three months.

A block of 20,000 September $10 puts to sell the lender’s
U.S.-listed shares was sold in a single transaction that lifted
put volume to 173 times the four-week average and accounted for
all but 285 of today’s options trades. The shares climbed 2.7
percent to $11.60 as of 4 p.m. in New York.

“This investor appears to expect downside in shares to be
limited, and is expressing comfort in getting long shares should
they fall below the $10 level heading into September
expiration,” options strategists at Susquehanna Financial Group
LLP in Bala Cynwyd, Pennsylvania, wrote in a report today.

Selling a put is a bet that the underlying security will
remain above the strike price, allowing the seller to keep the
premium paid. If the stock falls below the put’s strike, the
contract’s seller may be required to buy the shares at the
strike price. Each option is linked to 100 shares of the
underlying stock.

Santander Brasil’s U.S. shares are down from last year’s
peak of $15.57 in November. They fell to a seven-month low Feb.
4 after the lender said its loan portfolio expanded 4 percent
its fourth quarter, falling short of an estimate from Credit
Suisse Group AG. Credit Suisse cut its rating on Santander
shares to “underperform” from “neutral” on Feb. 3.

To contact the reporter on this story:
Jeff Kearns in New York at
jkearns3@bloomberg.net.

To contact the editor responsible for this story:
Nick Baker at nbaker7@bloomberg.net.