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

Tammy’s #OneGoodReason
Tammy’s #OneGoodReason              
Lisa’s #OneGoodReason
Lisa’s #OneGoodReason               
Russell’s #OneGoodReason
Russell’s #OneGoodReason            

Stocks

Referenced

77%

Most Active by Volume

50,398,477
  • $7.225 ▲ 20.62%
39,137,625
  • $17.123 ▲ 0.55%
26,266,383
  • $9.055 ▼ 3.87%
25,901,075
  • $74.80 ▲ 0.93%
25,353,498
  • $33.71 ▲ 3.47%
20,771,705
  • $101.17 ▲ 1.15%
20,270,573
  • $107.53 ▲ 0.51%
19,309,923
  • $4.0399 ▼ 9.42%
As of 10/31/2014, 12:23 PM

Find a Credit Card

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