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April 23, 2013  Tue 9:49 AM CT

VMC: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is looking for lower volatility in Vulcan Materials as its shares bounce today.

More than 5,000 VMC options have changed hands so far today, compared with a daily average of just 150 in the last month. All but 25 of the contracts are in a single trade in the concrete and cement maker.

optionMONSTER systems show that a trader sold two blocks of 2,500 August 45 puts at the same second for $2.30 and $2.25. This is clearly a new position, as the open interest in the strike was just 174 contracts before the session began.

Less than a minute later, a block of 180,000 VMC shares was sold for $47.20 in a trade that represents more than 70 percent of the day's total stock volume in the name. The combination of these shares and the short puts creates an overall position that is delta-neutral and aimed at lower volatility.

The trader is therefore looking for VMC to stay range-bound near $45 through expiration in mid-August and/or for its actual volatility to be less than that implied by the options. (See our Education section)

VMC is up 1.16 percent this morning to $47.21. It bounced off support at $45, which has been a significant level going back to mid-September. Shares did climb above $59 at the January highs.
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It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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