OptionsHouse

Options Trading News

November 20, 2012  Tue 4:32 AM CT

MOS: SEE CHART GET CHAIN FIND STRATEGIES
Mosaic bounced yesterday, and traders looked for the gains to continue.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 1,800 March 52.50 calls for $2.53 and the sale of an equal number of March 60 calls for $0.50. Volume exceeded open interest at both strikes, indicating that new positions were initiated.

The trade cost $2.03 and will earn a maximum profit of 269 percent if the fertilizer stock rallies back to $60 or higher by expiration. That's roughly the same price where it peaked in September, so the investor is apparently looking for a retest of that level. (See our Education section for more on the strategy, known as a bullish call spread because it leverages a move between two prices.)

MOS rose 3.39 percent to $51.20 yesterday but is down 15 percent in the last two months. The company was trading at its lowest price since mid-June before yesterday's rebound, having fallen along with most other materials stocks on concerns about a slowing economy.

Total option volume in MOS was 3 times greater than average in the session, according to the Heat Seeker.
Share this article with your friends


Related Stories

MOS

Last-minute bulls target Mosaic

June 26, 2015

The fertilizer producer fell sharply after poor quarterly results from Russia-based Uralkali, the world's largest potash manufacturer, but shares have been trying to recover.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »