Fluor is near its long-term lows, but one investor apparently
finds it attractive at these levels.
optionMONSTER's systems detected the purchase of about 2,000
January 50 calls for $3.71 and the sale of an equal number of
January 42.50 puts for $3.31. Volume was more than 5 times open
interest at both strikes.
The investor now stands to profit from a rally in the construction
company because higher share prices will make the
appreciate and reduce the value of the
puts sold short
. If FLR declines, however, the opposite will be true and they will
While similar to owning shares, the position is much more leveraged
thanks to its low entry price of just $0.40. That would translate
into a profit of 900 percent if the stock rallies just 16 percent
to $54. It also differs from owning common equities because it will
track movements in the share price less closely as
and will expire worthless if the stock remains between $42.50 and
FLR declined 3.93 percent to $46.73 yesterday. It has lost 23
percent of its value in the last three months and is back near the
same level where it bounced in October. The last earnings report on
May 3 beat expectations and guidance was strong, which could also
make traders expect a rebound.
Overall option volume was triple the daily average, according to
the Heat Seeker.