Learn the trade here. Make it on tradeMONSTER

Options Trading News

January 14, 2013  Mon 1:16 AM CT

VALE: SEE CHART GET CHAIN FIND STRATEGIES
Vale has been losing ground since starting the year at multi-month highs, but one large trade is betting that the Brazilian metals and mining company will be range-bound.

optionMONSTER systems show that 10,000 March 20 puts were sold for the bid price of $0.84. The previous open interest at the strike had been 5,653, so this is a new position.

A minute later, a block of 440,000 shares was bought for $20.23. Given the delta of the options, this appears to be like a directionally neutral position that is designed to profit if the actual volatility of the shares is less than that implied by the options. (See our Education section)

More than two hours later, 5,000 June 20 puts were bought for the ask price of $1.62. That volume was also more than open interest but looks to be unrelated to the earlier trade.

VALE was down 1.9 percent on Friday, closing the week at $20.32. It was just shy of $22 on the first day of the year, which was its highest price since the start of May 2012.

More than 41,000 VALE contracts traded on Friday, twice its daily option average.
Share this article with your friends


Related Stories

VALE

Why trader thinks Vale will bounce

September 11, 2014

The mining and materials company yesterday fell to its lowest price since March 2009, but that is also near a level that has held as support several times for more than a year.

Premium Services

Free Webinars

Swing Trading w/ Jon Najarian and Ron Ianieri

Education & Strategy

Make your rules, and stick by them!

New traders often act on the recommendations of others or on gut feel. But that is a quick way to...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER