One investor is looking for W.R. Grace to break out to new highs.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 3,000 December 60 calls for $4. Equal-sized blocks were sold in the December 50 puts and the December 70 calls for $1.65 and $0.65, respectively. Volume was more than double open interest at all three strikes.
The strategy cost $1.70 and will earn a maximum profit of 488 percent if the chemical stock closes at or above $70 on expiration. He or she also faces potential losses on a push toward or below $50.
GRA fell 1.01 percent to $58.06 in morning trading, and is up more than 50 percent in the last year. The company has repeatedly beaten earnings estimates amid strong pricing and growing Latin American demand for its cement additives.
Shares are now back near their previous highs from early May. Today's option trade, which combines elements of a vertical call spread and short puts, is apparently looking for a breakout above those peaks. (See our Education Section .)
The three-way trade accounted for all the options activity in GRA, and pushed total volume to 14 times greater than average.
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