Breakdown feared for Precision Castparts Precision Castparts is attempting to hold a key level, but some fear it might break down.
optionMONSTER's Depth Charge tracking system detected the purchase of 3,600 September 150 puts for $3.20 and the sale of an equal number of September 140 puts for $1.30. Volume was more than 6 times open interest in both strikes.
This bearish put spread cost $1.90 to open and will earn a maximum profit of 426 percent if the maker of metal components closes at or below $140 on expiration. (See our Education section)
PCP fell 2.38 percent to $156.94 yesterday but is up 13 percent so far this year. The company has enjoyed strong demand from the commercial-aircraft industry, beating forecasts the last time it reported earnings on July 28.
The $155-$160 area is important because it's where the stock peaked in early May, which could lead some chart watchers to expect support around this level. It's also the location of the 50-day moving average. If PCP falls below it, sellers could pile on.
Overall option volume was 13 times greater than average in the name yesterday, with puts outnumbering calls by 25 to 1.
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