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Bears on board United Continental

Chris McKhann (chris.mckhann@optionmonster.com)

Someone thinks United Continental might be ready to come back to earth.

optionMONSTER's Depth Charge tracking program detected heavy put buying in the airline, with the biggest trade focusing on a spread in September. A block of 5,000 September 20 puts was bought for $0.42and the same number of the 15s were sold for $0.12. Volume was well above open interest at both strikes, indicating a new position was implemented.

The vertical spread cost the trader $0.30, which is the most he or she can lose if UAL remains above $20. The potential gain is $4.70, or 1,567 percent, on a drop to $15. See our Education Section for more on how to generate leverage using options.

UAL finished the day up 0.09 percent to $31.90. It's slightly below last week's $32.50 peak, the highest level since February 2008, and bottomed below $18 last summer. More than 21,000 UAL options traded on the day, twice the daily average. Puts outnumbered calls by a bearish 10-to-1 ratio.

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