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

Cheap Ways to Sleep Better
Cheap Ways to Sleep Better          

Stocks

Referenced

100%

Most Active by Volume

105,679,298
  • $16.13 ▼ 0.19%
43,130,824
  • $101.32 ▲ 0.74%
24,108,376
  • $59.80 ▲ 7.34%
22,524,427
  • $26.15 ▼ 1.06%
22,194,114
  • $24.65 ▼ 0.96%
21,835,360
  • $99.05 ▲ 0.15%
20,872,575
  • $34.94 ▼ 0.60%
20,561,803
    $74.57 unch
As of 8/22/2014, 04:02 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com