Mosaic is near its 52-week low, and one investor doesn't expect
a quick rebound.
optionMONSTER's monitoring systems detected the sale of about
10,000 October 60 calls for $2.38 to $2.47. Roughly the same number
of October 67.50 calls were bought at the same time for $0.61 to
$0.64. Volume was below open interest in the higher strike, so
there are two possible explanations for the trade.
One is that the trader is short calls against a long position in
the shares--a common strategy known as a
. (See our
Now that the stock has fallen, the investor could be rolling the
position down to the lower strike. That would earn incremental
income of about $1.75 while cutting $7.50 of potential upside if
Alternatively, the positions in both options may have been opened.
Then the trade was a
designed to earn money from MOS remaining below $60, with the
higher-strike call buying serving as a hedge in case the stock
MOS has fallen 4.86 percent to $57.19 so far today and has lost 20
percent in the last week. They're down today after higher input
prices caused the fertilizer company to miss estimates in a
preliminary earnings. Revenue was strong, but sellers are focusing
on the margin pressure.
Overall option volume in the name is more than twice the average
amount so far today.
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