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Range-bound play in LyondellBasell

By: optionMONSTER
Posted: 5/14/2013 4:03:00 AM
Referenced Stocks: LYB

One trader apparently thinks that LyondellBasell Industries is going nowhere in a hurry.

optionMONSTER's tracking programs detected the sale of about 2,800 contracts each in the September 55 puts for $2.15 and the September 70 calls for $1.40. That amounts to a total credit of $3.55.

The investor will keep that amount as profit if the chemical stock remains between $55 and $70 through expiration. Gains will erode outside that range, turning to losses below $51.45 and above $73.55. (See our Education section for more on the strategy, known as a short strangle .)

LYB rose 1.22 percent to $62.30 yesterday. The chemical company rallied more than 40 percent in the second half of 2012 but has been swinging in a range since. It made a lower low in April than in February and now appears to have made a lower high. That could be leading some chart watchers to think that it's losing momentum and to support a neutral view.

Yesterday's total option volume in the name was triple its daily average.