Huntsman has been weakening along with most other chemical
companies, and one investor is hitting the sell button.
optionMONSTER's Depth Charge tracking system detected a large
three-way trade yesterday, with each part consisting of 15,168
contracts. The May 17 calls were sold for $1.53, the June 18 calls
were sold for $1.10, and the June 15 puts were bought for $0.11.
Volume was below open interest in the May contracts.
The transaction is noteworthy because it appears that an investor
closed a bullish long position in the front-month calls contracts
and changed it to a bearish strategy in the June expiration. The
trader then collected $2.52 of premium and now stands to profit
from the shares heading lower rather than rallying.
HUN fell 0.95 percent to $18.72 in afternoon trading. The shares
had more than doubled between September and early this month, when
they topped out around the same level where they had traded
immediately before a large bearish gap in June 2008. They formed a
so-called shooting-star candlestick pattern near that level, which
some chart watchers may consider evidence of a top.
The chemical sector has been one of the strongest in the market
this year, with almost every company crushing forecasts. HUN's
reported profit of $0.47 a share on May 5--almost twice the $0.24
consensus estimate. Share prices have been struggling since early
May, however. (Cellulose company Buckeye Technologies also saw
noteworthy put action yesterday.)
The bearish trade on HUN pushed overall options volume in the name
to 11 times greater than average, according to the Depth
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.