Markets

Strategy looks for downside in FedEx

FedEx has rebounded to a potential resistance level, and one investor is worried about another push to the downside for the global delivery giant.

optionMONSTER's Depth Charge monitoring program detected the purchase of 2,500 October 75 puts for $2.62. Equal numbers of contracts were sold in the October 85 calls for $0.81 and the October 67.50 puts for $0.91.

The transaction resulted in a net cost of $0.90 and will earn a maximum profit of 733 percent if FDX closes at or below $67.50 on expiration. The trader is now obligated to sell stock is it rallies back to $85, so he or she is probably an investor who was hedging an existing position and is willing to exit the position at a higher price.

FDX is down 2.02 percent to $75.50 so far today and is trying to work its way back from the selloff in late July and early August. It's now back to a downward sloping trendline from the recent highs and is pushing against its 30-day moving average. That could lead some chart watchers to believe that its short-term direction is lower.

The trade accounts for more than half the volume in FDX so far today, according to the Depth Charge.

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.

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