Bulls are betting on Celanese rebound
David Russell | [email protected]
optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,000 September 42.50 calls for $1.65. Equal-sized blocks were sold at the same time in the September 30 puts for $1 and the September 47.50 calls for $0.50. Volume was more than 5 times open interest at all three strikes.
The trade cost a net $0.15 and will earn a maximum profit of more than 3,000 percent if CE closes at or above $47.50 on expiration. It also faces potential losses below $30, but the investor may be comfortable taking that risk because the chemical stock consolidated around that level in mid-2010 and bounced at it last year.
CE is up 3.31 percent to $37.75 in afternoon trading. The stock has lost more than one-fifth of its value since the beginning of May, but the downward momentum is slowing. Concerns about Europe hurt results the last time earnings came out in April.
Overall option volume in the stock is 8 times greater than average so far in the session, according to the Heat Seeker.