How put trade shows caution in Fluor

By
A A A

Fluor has been gaining, but one investor remains cautious.

optionMONSTER's Depth Charge tracking system detected the purchase of 2,500 January 57.50 puts for $1.40 and the sale of an equal number of January 55 puts for $0.55. That translates into a cost of $0.85.

The position will expand in value if the construction stock pushes lower, reaching a maximum profit of 355 percent at or below $55. (See our Education section for more on the strategy, known as a vertical spread because it leverages a move between two price points in the same month.)

FLR rose 2.64 percent to $58.74 on Monday and is up 11 percent in the last month. It's been climbing despite a weak earnings report in November, continuing a slow process of making higher lows since early 2009.

Given that the stock is near the top of its recent range, some traders may be expecting a pullback. A put spread would be a common way to hedge against such a drop.

Total option volume was 6 times greater than average in the session, according to the Depth Charge. Puts outnumbered calls by a bearish 14-to-1 ratio.



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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: FLR

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

How to Save Money at Bars
How to Save Money at Bars           

Stocks

Referenced

100%

Most Active by Volume

44,823,339
  • $75.19 ▲ 0.28%
43,744,171
  • $3.44 ▼ 0.29%
42,340,022
  • $97.671 ▲ 0.66%
34,178,145
  • $17.62 ▼ 1.23%
34,028,998
  • $15.59 ▼ 0.19%
32,055,708
  • $21.23 ▼ 2.41%
31,539,235
  • $3.76 ▲ 0.80%
30,434,619
    $34.25 unch
As of 7/25/2014, 04:03 PM