One investor is looking for W.R. Grace to break out to new
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 3,000 December 60 calls for $4. Equal-sized blocks were sold in
the December 50 puts and the December 70 calls for $1.65 and $0.65,
respectively. Volume was more than double open interest at all
The strategy cost $1.70 and will earn a maximum profit of 488
percent if the chemical stock closes at or above $70 on expiration.
He or she also faces potential losses on a push toward or below
GRA fell 1.01 percent to $58.06 in morning trading, and is up more
than 50 percent in the last year. The company has repeatedly beaten
earnings estimates amid strong pricing and growing Latin American
demand for its cement additives.
Shares are now back near their previous highs from early May.
Today's option trade, which combines elements of a vertical call
spread and short puts, is apparently looking for a breakout above
those peaks. (See our
The three-way trade accounted for all the options activity in GRA,
and pushed total volume to 14 times greater than average.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.