Trade sticks with Foster Wheeler

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Foster Wheeler has been rallying, and one investor thinks the gains will continue.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,000 October 22 calls for $0.81 and the sale of an equal number of October 20 puts for $0.88. A block of 1,000 September 22 calls were sold at the same time for $0.38 but volume was below open interest.

It appears the trader came into the session long the September contracts. He or she then sold those and opened a new position at the longer expiration, giving them an additional month to benefit from upside in the construction company, which is heavily focused on the energy industry.

Rolling forward in time also maintains a close correlation to the underlying share price. See our Education Section for more on how time decay affects option values.

FWLT fell .48 percent to $20.90 in morning trading, but is up 18 percent in the last month. Today's trade pushed total option volume in the name to more than twice normal levels, according to Heat Seeker.



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: FWLT

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