Construction stocks are starting to perform, and one investor
apparently wants to give Fluor room to run.
optionMONSTER's tracking programs detected the purchase of about
1,800 September 70 calls for $1.30 and the sale of a similar number
of October 75 calls for $0.45 at the same time. Volume was below
open interest at the lower strike, which suggests an existing short
position was closed and rolled to the higher strike.
The investor probably owns shares in the company, whose customers
are in the energy, infrastructure, and mining industries, plus the
public sector. He or she probably sold the 70s at an earlier date
to earn income and now wants to adjust the position higher. This
way they can collect an additional $5 on the stock. Making the swap
Otherwise, the investor would be forced to unload the stock
tomorrow for $70. Known as a
, the strategy is used to
in a long position. (See our
FLR is up 1.8 percent to $71.17 yesterday and has risen 20 percent
since the beginning of July. The engineering and construction
company is climbing as sentiment improves toward the global
economy--especially in the energy space--and after its last two
earnings reports beat expectations. Other names such as Foster
Wheeler and Chicago Bridge & Iron have also been strong,
according to our
Total option volume is 14.5 times greater than average in the name
so far today.
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.
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