Huntsman is coming off a major rally, and one investor wants out.
optionMONSTER's Depth Charge tracking system detected the purchase of 5,000 August 14 puts for $0.23 and the sale of an equal number of August 16 calls for $1.96. Volume was more than 21 times open interest in both strikes.
The trade was tantamount to selling 500,000 shares in the chemical company, whose compounds are used in products such as fabric and paints. The investor received a credit of $1.70 and locked in a minimum exit price of $15.70.
If the stock remains above $16 on expiration, the trader will be forced to sell for that price. But including the credit, the shares would fetch a total of $17.70.
HUN fell 1.94 percent to $17.22 yesterday and is down 10 percent in the last month. The stock more than doubled between last summer and early May, following a rally in the chemical sector. But it has been falling since then, and was the target of downside trades on May 12 and May 17.
The recent bearishness has come despite the last earnings report on May 5 crushing forecasts on both the top and bottom lines.
Yesterday's trade pushed total option volume in HUN to 4 times greater than average.
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