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August 9, 2013  Fri 2:22 AM CT

A large put trade led the option activity in Darling International as it headed back toward all-time highs yesterday.

optionMONSTER's Depth Charge system detected the purchase of 10,000 January 20 puts for the ask price of $1.05 and the sale of 20,000 January 17.50 puts for $0.30. The volume at each strike was multiples of previous open interest, so this is a new ratio spread.

The spread is known as a ratio because twice as many contracts were sold than bought. It cost $0.45 to open, which is the amount at risk if DAR is above $20 at expiration in mid-January. The maximum gain would come with DAR right at $17.50 at that time. (See our Education section)

DAR is up 1.45 percent to $20.95 after hitting a lifetime peak of $21.35 on Monday. The company, which provides cooking-waste recycling and recovery services to the food industry, was down at $15 in November.

More than 32,000 DAR options changed hands in the session, compared to total open interest of 13,792 contracts and a daily average of just 39. Yesterday's put spread made up almost all that volume.
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