Options Trading News

April 19, 2013  Fri 5:16 AM CT

Masco fell yesterday, and traders looked for more downside.

optionMONSTER's Depth Charge program detected the purchase of more than 13,000 May 18 puts, almost all of which priced for $0.60. These are clearly new positions, as the volume was more than 40 times the strike's open interest before the session began.

Puts lock in the price where investors can sell shares in the home-improvement company, which have been edging lower since March 20. These options stand to generate significant leverage to the downside if MAS continues to fall, so they might be hedging a long position in the stock or just betting on a drop. (See our Education section)

MAS ended the session down 1.11 percent to $18.79. There is some support at the $18 level, but continued selling could quickly push it to $16. The company is scheduled to report earnings on April 30.

Total option volume was 14 times greater than average yesterday, with puts outnumbering calls by more than 21 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends

Related Stories


Masco viewed on solid ground

November 27, 2015

The maker of faucets, cabinets, and paint is up 11 percent in the last month and expected to remain above $25 through next summer.


Call buyers keep building in Masco

October 29, 2015

The cabinet manufacturer has climbed to its highest level in more than eight years, and traders are looking for more gains by Christmas.


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »