One big investor is betting that Norfolk Southern will stay on track into the New Year.
optionMONSTER's tracking programs detected the sale of more than 14,000 January 65 puts for $0.65 and the purchase of an equal number of January 55 puts for $0.15. Volume was more than triple open interest in both strikes.
NSC is up 0.42 percent to $70.11 in midday trading and is attempting to hold support at its 200-day moving average. It's been riding a bullish trend in the railroad stocks, beating estimates the last two times earnings came out.
Based on today's trade, it appears that the investor is using the puts to manage a potential entry into the stock. The strategy will let the trader enter NSC on a pullback while allowing him or her to make some money in case it doesn't drop all the way to $65. At the same time, the 55 puts provide a hedge in case a major selloff occurs.
The transaction pushed total option volume to 27 times greater than average so far today.
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