Floor seen beneath Texas Industries


Texas Industries is at its highest level in nearly five years, and one trader is betting that any downside will be limited in coming months.

A trader sold 2,500 July 60 puts in about 11 minutes on Friday, including a block of 1,250 that went for $3.70 and another of 1,093 for $3.60, according to optionMONSTER's tracking systems. These are clearly new positions, as the open interest in the strike was just 31 contracts before the session began.

This put seller is looking for TXI to stay above $60 through expiration in mid-July. If the stock falls below that level, the trader will face the obligation to buy shares at an effective price of $56.30 to $56.40 once the credits from the put sales are factored in. (See our Education section)

TXI rose 1.06 percent on Friday to close the week at $64.80. Last Tuesday the cement and gravel producer climbed to $65.28, its highest price since June 2008.

The building materials company, whose products include cement and gravel, has seen its stock price double since June 2012 with the housing sector's ongoing recovery. Management is scheduled to deliver its next quarterly report on March 28.

Total volume in the name was 2,865 contracts on Friday, nearly 9 times its daily average of just 336 in the last month.

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