For the second day in a row, traders are looking for Manitowoc to rally.
optionMONSTER's monitoring programs detected the sale of 5,000 January 27 puts for $1.85. The trade, which dwarfed previous open interest of 157 contracts, reflects a strong conviction that the industrial stock will hold above $27 through early next year.
If the investor is right, he or she will keep the $1.85 and the contracts will expire worthless. Otherwise, they'll be forced to pay $27 for the stock--no matter how low it may fall. (See our Education section for more on the benefits and risks of selling puts .)
MTW surged after the transaction hit and is now up 2.85 percent to $29.56 in afternoon trading. There was a trade idea in the September 30 calls in our premium InsideOption Pro service yesterday on the heels of bullish activity. Those same contracts have already appreciated 50 percent.
The company makes cranes and commercial food equipment. It tripled in value between July 2012 and early this year, only to fall on a poor earnings report last month. The shares recently held their ground around $27 before jolting back to life.
In addition to the put selling, about 6,500 January 30 calls were purchased for $3.10 today. While bullish, it's not clear that new positions were initiated because the volume was below open interest at the strike.
More than 14,000 contracts have changed hands in the name so far today, already 8 times its full-session average for the last month.
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