OptionsHouse

Options Trading News

September 21, 2016  Wed 10:35 AM CT

VALE : SEE CHART GET CHAIN FIND STRATEGIES

A large trade is apparently betting that downside potential is limited in Vale.

optionMONSTER's monitoring systems detected the sale of 36,000 December 5 puts in one print for $0.39 today. Volume was well above the strike's open interest of 15,916 contracts, showing that this is a new position.

Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think the risk of a big drop is limited. (See our Education section.)

VALE is up 4.11 percent to $5.32 in morning trading but is down 14 percent in the last month. The Brazilian mining giant is scheduled to report earnings in pre-market hours on Oct. 27.

Overall option volume in the name is twice its daily average so far today.

Share this article with your friends


Related Stories

VALE

Vale receives large vote of confidence

September 29, 2016

A big put sale is apparently betting that downside potential will be limited the Brazilian mining giant after its next quarterly results.

VALE

Short-term call buyers piling into Vale

September 1, 2016

The Brazilian mining giant has rallied 27 percent in the last three months and is scheduled to report earnings in pre-market hours on Oct. 27.

OptionsHouse

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »