Options Trading News

September 21, 2016  Wed 10:35 AM CT


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.

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