Ingersoll-Rand is trying to climb, and one investor has protection in place.
optionMONSTER's Depth Charge tracking system detected the purchase of 1,000 September 40 puts for $2.55. Equal-sized blocks were sold at the same time in the September 36 puts for $1.25 and the September 45 calls for $1.50. Volume was more than quadruple open interest at all three strikes.
The trader is probably using the position to hedge a long position in the industrial company, whose products include air conditioners, hand tools and pumps. He or she collected a credit of $0.20 and will earn an additional $4 if IR drops to $36 or lower. The trader will also be forced to sell the stock if it closes at or above $45 on expiration.
IR rose 3.03 percent to $41.46 yesterday. It rallied more by more than 30 percent between January and mid-February but has been trapped in a range since then. Earnings and revenue beat expectations the last time quarterly results were announced on April 20. (See researchLAB for more)
Overall option volume in the name was 7 times greater than average in the session.
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