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Bears hitching a ride on Con-Way

David Russell (david.russell@optionmonster.com)

Traders are bracing for a pullback in Con-Way as the trucker pauses at a key long-term resistance.

optionMONSTER's Depth Charge monitoring system detected the purchase of some 4,000 August 40 puts for $1.60 and the sale of a similar number of  August 35 puts for $0.35. There was barely any open interest at either strike when the session began, showing that new positions were initiated.

Known as put vertical spread , the trade cost $1.25 to open and will earn a maximum profit of 300 percent if the stock closes at or below $35 at expiration in mid-August. (See our Education section for more on how to harness the leverage of options.)

CNW is down 0.64 percent to $41.60 in morning trading but is up 49 percent so far this year. The shares are now back around the same level where they peaked in mid-2011, which could make some chart watchers believe that they will pause or drop.

Second-quarter earnings come out on July 31. The company's last set of numbers missed expectations on the top and bottom lines.

Total option volume is 39 times greater than average so far today, according to the Depth Charge. Puts outnumber calls by a bearish 260-to-1 ratio.

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