Bull buys more time for Vale to rally

Chris McKhann (chris.mckhann@optionmonster.com)

A large four-way trade is bullish on Brazilian metals and mining company Vale, which reports earnings at the end of this month.  

optionMONSTER systems show that 10,000 each of the April and May 14 and 15 calls traded yesterday. The April 15s were bought for $0.02 while the April 14s were sold for $0.10, with volume below the previous open interest in each strike. At the same time, the May 14 calls were bought for $0.52 while the May 15s were sold for $0.18, with volume above the open interest in those strikes in what were clearly new positions.

The trader is closing a vertical spread in April, which expires at the end of today's session, and rolling it to May. The new spread is looking for a rally to $15 by expiration four weeks from tomorrow. (See our Education section)

VALE slipped 0.22 percent to $13.87 yesterday. The stock was above $15 last week and touched that level on Monday, but shares were below $13 three weeks ago. 

The company is scheduled to release first-quarter results on April 30.


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