U.S. Markets closed

Limited downside seen in Lear

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Lear has pulled back from all-time highs in recent weeks, but one large trader apparently believes that further losses will be limited.

optionMONSTER's tracking systems detected the sale of 5,550 February 70 puts in one print for the bid price $0.35 yesterday. This is clearly a new position, as open interest in the strike was a mere 2 contracts before the trade appeared.

The put seller will keep the $0.35 credit as profit if LEA stays above $70 through expiration in about seven weeks. But if the stock falls below that strike price, the trader will be on the hook to buy shares at that level. (See our Education section)

LEA gained 0.24 percent yesterday to close at $79.21. The manufacturer of car seats has declined since peaking at $83.72 on Dec. 2 but is still up more than 65 percent in the last year. The stock last closed below $70 in early September.

The put sale made up almost all of yesterday's option volume in LEA, which was more than 22 times its daily average for the last month.

More From optionMONSTER