Fluor has been gaining, but one investor remains cautious.
optionMONSTER's Depth Charge tracking system detected the purchase of 2,500 January 57.50 puts for $1.40 and the sale of an equal number of January 55 puts for $0.55. That translates into a cost of $0.85.
The position will expand in value if the construction stock pushes lower, reaching a maximum profit of 355 percent at or below $55. (See our Education section for more on the strategy, known as a vertical spread because it leverages a move between two price points in the same month.)
FLR rose 2.64 percent to $58.74 on Monday and is up 11 percent in the last month. It's been climbing despite a weak earnings report in November, continuing a slow process of making higher lows since early 2009.
Given that the stock is near the top of its recent range, some traders may be expecting a pullback. A put spread would be a common way to hedge against such a drop.
Total option volume was 6 times greater than average in the session, according to the Depth Charge. Puts outnumbered calls by a bearish 14-to-1 ratio.
More From optionMONSTER