Tyco is facing a bearish trade today, but it is likely protective positioning as the stock gives up some of Friday's gains.
TYC is down 1.32 percent to trade at $53.16 but remains in the middle of its recent range. The manufacturer of security systems tested support at $51 that has been in place since February, but it is coming off a 10-year high of $57.75 set at the end of April.
A trader bought 2,500 August 50 puts for $1.25 and sold the same number of August 55 calls for $1.38, according to optionMONSTER's systems. There was no open interest at either strike, as August is a new expiration.
This bearish combination could be done outright to profit if TYC falls back to those levels from the start of the year. It is more likely a collar position to protect a long position in the stock against the possibility of such a pullback. (See our Education section)
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