POT, LGF Options – Unusual Trading Activity – March 31, 2014
This week we’re taking a look at unusual options trading activity in Potash (POT) and Lions Gate Entertainment (LGF).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
Potash (POT)
Put selling activity in fertilizer giant POT suggests the stock has limited downside.
POT is currently trading for $36.12. The price is 29% above the 52-week low of $27.94 and is 16% below the 52-week high of $42.80.
Today, over 3,500 April 37 puts were sold on POT. The largest block came in at 2,100 for $1.60. Open interest on the strike was below 1,000, so this is definitely opening activity.
The put selling will be maximized if POT closes above $37 by April expiration. However, this could also be a play to get long POT at a cheaper price given the puts are currently well in the money.
Lions Gate Entertainment (LGF)
At least one trader believes the LGF is going to rebound from its sharp selloff.
LGF, a motion picture producer and distributor, is trading for $26.62 and is up over 5% today. The shares are up 20% from the 52-week low of $22.17 and are 37% below the 52-week high of $37.68.
The trader purchased 13,300 April 26 calls while selling the same number of April 31 calls for a total price of $0.70. The bullish call spread will be maximized if the stock finishes at $31 or above by April expiration.
LGF has sold off hard after its potential blockbuster movie, Divergent, hasn’t performed as well as expected. The trader obviously believes the selling is overdone and was able to buy upside at a very reasonable price.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
