Strategy positions for pop in Mosaic


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Mosaic is trying to bounce, and one investor is looking for a quick rally.

optionMONSTER's Heat Seeker tracking system detected a surge of call activity in the fertilizer stock, with roughly 5,000 contracts trading in three different strikes. The November 55s were bought for $3, while the November 60s and December 55s were sold for about $1.17 and $4.02 and $4.03, respectively.

Volume was below open interest in December, which indicates that an existing position was closed in that month. The activity suggests that the investor rolled a bullish trade one month closer and is now using a vertical spread . It's somewhat unusual because rolls normally go in the opposite direction as traders look for more time. (See our Education section)

This adjustment reflects strong short-term bullishness toward MOS, which came into the session down by more than one-quarter of its value in the preceding three months. It's now up 4.86 percent to $53.68 in midday trading.

The last earnings report on Sept. 23 was mixed, with revenue strong but profit weak as ammonia and sulfur costs squeezed margins.

Overall options volume in MOS is slightly below average, with calls outnumbering puts by more than 9 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Options

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