Market News

October 13, 2016  Thu 6:14 AM CT

A large trade is positioning for a possible pullback in Vale by the end of the year.

optionMONSTER's monitoring program shows that 5,000 November 6 puts were sold for $0.51 while 4,000 December 5.50 puts were purchased for $0.34 yesterday. Volume was below open interest in the higher contracts, indicating that a bearish position was rolled to a lower strike one month later and reduced in size.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

VALE rose 0.69 percent to $5.82 yesterday and is up 7 percent in the last month. The Brazilian mining giant is scheduled to report earnings in pre-market hours on Oct. 27.

Overall option volume was about average in VALE.

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