Tone turns bearish as FedEx struggles

By
A A A

FedEx is struggling, and traders are nervous.

optionMONSTER's Depth Charge tracking program detected the purchase of 4,000 October 70 puts for $1.86 and the sale of an equal number of October 60 puts for $0.72. Volume was more than 7 times open interest at both strikes.

Known as a bearish put spread , the trade cost $1.14 and will earn a maximum profit of 777 percent if the shipping stock closes at or below $60 on expiration. It hasn't seen that level since mid-2009.

FDX is up 1.65 percent to $88.06 in afternoon trading but has been trending downward since mid-February. It's been making lower lows and lower highs and has yet to recover from a sharp drop after its last earnings report on March 22. The stock is also below its 100-day moving average for the first time this year, which some chart watchers may consider a bearish sign.

Overall option volume in FDX is slightly above average so far today, with puts outnumbering calls by a bearish 3-to-1 ratio.




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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: FDX

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

77%

Most Active by Volume

85,117,424
  • $6.78 ▲ 11.88%
77,261,676
  • $17.53 ▲ 1.56%
61,066,548
  • $6.90 ▲ 2.99%
56,847,440
  • $112.65 ▲ 2.96%
52,788,366
  • $7.78 ▲ 1.83%
50,761,400
  • $25.14 ▲ 2.91%
47,781,237
  • $45.35 ▲ 10.18%
45,664,909
  • $7.17 ▲ 2.14%
As of 12/18/2014, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com