OptionsHouse

Options Trading News

September 22, 2016  Thu 6:45 AM CT

POST: SEE CHART GET CHAIN FIND STRATEGIES

A large trade is betting that Post Holdings will rebound by the end of the year.

optionMONSTER's market scanner shows that 3,000 December 80 calls were purchased for $3.40 while 3,000 December 90 calls were sold for $0.75 yesterday. This is new positioning, as volume was far above open interest in both strikes.

This vertical spread is looking for POST to rally above $80 by expiration in mid-December. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $90. (See our Education section)

POST fell 0.61 percent to $77.94 yesterday and is down 8 percent in the last month. The cereal maker is expected to announce quarterly results after the close on Nov. 21.

Overall option volume was 6 times greater than average in the name yesterday. Calls outnumbered puts by a bullish 21-to-1 ratio.

Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Continue to melt up? Think debit call spreads

The U.S. equities market is continuing to melt up. Even though the labor market is stagnant, the Fed keeps hinting that a short term interest rate hike is coming sometime soon.

View more education articles »