A second shot at Thompson Creek


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Thompson Creek has inflicted a world of hurt on one investor, but the trader is taking another chance.

optionMONSTER's tracking systems detected the sale of about 15,000 September 7 puts on the Canadian mining company for $0.75. Some 13,000 March 8 puts were bought at the same time for about $0.82, but volume was below open interest in that strike.

It appears that the trader had previously sold the March puts to earn income, hoping that the stock would hold its ground. But the stock collapsed, and now he or she is adjusting the position to give it time to rebound.

TC sold off hard on Tuesday when it reported a big drop in earnings and revenue after production costs soared and ore quality declined. The company's primary mineral is molybdenum, a so-called rare-earth element used in a broad array of electronics, including cellphones.

Shares declined an additional 1.09 percent to $7.28 yesterday. TC is now back to where it peaked several times in late 2011, which could lead some chart watchers to anticipate that it will now find support. If they're right, those September 7 puts will expire worthless and the trade will have succeeded . (See our Education section)

Overall option volume was 44 times greater than average in the session.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Options

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