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• Trinity climbs amid heavy activity
• Put seller targets Trinity Industries

• TRN 100% Rate It

The recent selloff in the market has driven Trinity Industries to a key support level, prompting at least one investor to write insurance against further declines.

optionMONSTER's tracking systems detected heavy selling of the July 17.50 puts, which changed hands 6,332 times against open interest of 731 contracts. They went for $1.05 early in the session and later for mostly $0.80.

TRN rose 4.73 percent to $20.80 on Friday but is down 24 percent since pulling back from a 20-month high on April 26. The builder of railroad cars has been falling along with the rest of the market, even though it reported strong earnings on April 28 and raised its full-year guidance amid strong order backlog.

The pullback in the stock has driven up implied volatility in the name to about 57 percent from 32 percent at the beginning of April. The trader may expect volatility to calm, which would depress the value of the puts sold short.

He or she will make money as long as TRN remains above $17.50 by expiration. The shares seem to have found support above that level, at about $19.60, which offered resistance in the final four months of last year.

Overall options volume in the name was six times greater than average in the session, with the put sales accounting for almost all the activity.

(Chart courtesy of tradeMONSTER)

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