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Huntsman sees three-way spread

Chris McKhann (chris.mckhann@optionmonster.com)

A three-way trade topped yesterday's option volume in chemical company Huntsman.

optionMONSTER systems show that a trader bought 13,438 February 18 puts for the ask price of $0.45 and sold the same number of February 21 calls for $2.48, with volume above the previous open interest in each strike. At that same time, the same number of the November 17 calls were bought for $5.53 against open interest of 14,263.

The trader appears to be closing the short calls in November and opening a new position in February with short calls and long puts . This was likely done as a hedge on long shares, though the trade is odd because it is in the money. (See our Education section)

HUN was up 0.58 percent to $22.62 yesterday, its highest close since May 2008. Shares were below $18 in mid-September.

More than 43,000 HUN options changed hands yesterday, 10 times the daily average in the last month.

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