Bearish spread targets Joy Global
Joy Global drew a complex put spread yesterday as shares hovered near 52-week highs.
A trader bought 2,000 January 57.50 puts for $1.80 and sold 4,000 January 52.50 puts for $0.70, according to optionMONSTER's Depth Charge tracking system. The volume was above the previous open interest in each strike, so this is a new ratio spread .
The trader cost a net $0.40, which is the amount at risk if JOY remains above $57.50 through early next year. The maximum gain on this spread would be realized if JOY is right at $52.50 at expiration, but the trader would be on the hook to buy shares if they fall below that level. (See our Education section)
JOY closed fractionally lower at $63.87 yesterday after peaking at $64.61 in the morning. The mining-equipment maker posted a 52-week closing high of $65.021 in mid-July but was below $59 three weeks ago.
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