Large volatility play targets Rio Tinto
Chris McKhann | [email protected]
More than 41,000 RIO options change hands, compared to a daily average of 2,350. Dominating the action are the October 50 calls.
A trader bought 29,000 of those contracts for the ask price of $1.90. The previous open interest was 1,793, so this is a new opening position.
Just afterward, 1.189 million RIO shares were sold for $48.9781. The combination of stock and options creates an overall position that is delta-neutral and therefore focused on more volatility rather than a specific move up or down.
RIO is up 4.6 percent to $49.6, adding to yesterday's gains. Shares of the U.K.-based miner were at a 52-week low of $39.14 a month ago but are now back to their levels of mid-March.