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Downside trade in Westlake Chemical

David Russell (david.russell@optionmonster.com)

Westlake Chemicals has been dropping, and the bears are piling in.

optionMONSTER's Depth Charge tracking program detected the sale of 1,700 April 75 puts for $9.60 against previous open interest. Minutes later, 2,100 contracts were purchased at the April 60 strike for $4 in a new opening trade.

The investor apparently came into yesterday's session owning the 75s and rolled that position to the lower strike. He or she collected $792,000 in the process and stands to profit from further downside in the vertically integrated maker of polymers, vinyls, and fabricated building products.

WLK fell 4.63 percent to close at $70 yesterday. It had rallied for most of 2012, roughly doubling between January and earlier this month, but then double-topped around $80 and has been dropping since.

Total option volume was 22 times greater than average in the name, according to the Depth Charge. Puts outnumbered calls by 31 to 1.

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