A generic image of a person holding a pen and paper
Markets

More downside expected in Huntsman

Investors have been selling Huntsman for the last five weeks, and they're still looking to the downside.

optionMONSTER's Depth Charge tracking system detected the purchase of 7,133 August puts for $0.55 and the sale of an equal number of August 18 calls for $0.73. The trade resulted in a credit of $0.18, and was probably the work of an investor who owns shares in the chemical company.

Known as a collar, the strategy would protect his or her position from a drop below $15.18 and limit their upside at $18. Similar-sized blocks traded against open interest in the June 15 puts and June 18 calls later in the session, indicating that an existing position was rolled forward by two months.

HUN fell 1.35 percent to $16.80 on Friday. It rallied hard along with most companies in the sector between last summer and early May, but then rolled over and has been falling since.

The Depth Charge has detected several downside trades in the stock during that period, the last of which was on June 13. Fundamentals have been excellent in chemical companies, but recently the entire group has been falling as investors take profits and as government reports have raised concerns that that the economy may be slowing.

Overall option volume in HUN was 19 times greater than average in Friday's session.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Options

Latest Markets Videos