Iron Mountain (IRM) flat on Unusually High Volume

On Monday, Iron Mountain Incorporated (Public, NYSE:IRM) traded 33.04M shares, way above their average volume of 1.44M.

What’s going on?

On December 29th, IRM announced that the Company's common stock was added to the S&P 500 Index

"It is a tremendous honor to join the prestigious S&P 500 Index, and we take great pride in this achievement," said Bob Brennan, Iron Mountain's president and chief executive officer. "We view our inclusion as recognition of the importance of our services and the strength of our market position. It is also a testament to the hard work and dedication of the more than 20,000 Iron Mountain employees around the world."

Iron Mountain will be added to the S&P 500 GICS (Global Industry Classification Standard) Industrials Economic Sector and the Diversified Support Services Sub-Industry Index.

Shares are up 20% since the news.

In spite of that, Put volume spiked on January 2nd. Players focused on the January $22.50 and $20 put strikes. 'It appears to be primarily put buying, perhaps on concerns about the company's short-term outlook,' said WhatsTrading.com option strategist Frederic Ruffy. In all, 4,838 puts traded in Iron Mountain compared to only 420 calls, five times the usual combined volume.

Fellow Stockmasters, something fishy is going on here. The high volume can’t be attributed to their addition to the SAP 500 index because the stock wasn’t added to the index until after the market close today.

With the unusually high put volume, I’m going to have to go with the bears on this one. IRM’s balance sheet isn’t that pretty, plus they are overloaded with debt. There are about 100 stocks I can think of right now that I would buy before I bought IRM.

If you’re going to buy IRM, short it or buy puts, that’s my opinion.

Disclaimer: The author owns no positions in any stocks mentioned in this article