The bulls think Ingersoll-Rand has more room to run.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 4,250 September 38 calls for $3.60. Equal-sized blocks were sold in the September 28 puts for $1 and the September 48 calls for $0.55. There was barely any open interest in any of the strikes when the trade appeared, indicating that these are new positions.
Together, the three legs result in a bullish strategy before the industrial conglomerate issues fourth-quarter results tomorrow morning. It cost $2.05 and will earn a maximum profit of 387 percent if IR closes at or above $48 on expiration. It will also lose money if shares drop violently.
IR is up 0.54 percent to $37.55 in afternoon trading and 23 percent so far this year. Management cut guidance the last three earning reports.
Overall option volume in the name is more than quadruple the daily average so far today, according to the Heat Seeker.
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