Options Trading News

June 15, 2012  Fri 11:01 AM CT

Mosaic is seeing an unusual put trade as its stock attempts to rebound from multi-year lows.

MOS is 2.5 percent to $48.78 today in midday trading as shares remain in their range of the last week but climb off a two-year low of $44.43 reached on June 4. The fertilizer company has been trending lower from the $60 level in the last two months and was trading above $70 as recently as September.

A trader bought 4,000 June 55 puts for $6.50 against open interest of 3 contracts, then sold two blocks of 2,000 September 55 puts for $7.85 and $7.90 in the next minute, according to optionMONSTER's systems. The open interest at the latter strike was 1,517 contracts.

This short calendar spread is a bit odd because it is in the money and using options that finish trading today. On Monday the trader will simply have the September 55 short puts unless he or she buys more near-term puts to hedge the position. (See our Education section)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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