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Navistar receives a vote of confidence

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Navistar is hovering at multi-month highs, and one large trader is betting that any near-term downside will be limited.

optionMONSTER's tracking systems detected the sale of 5,000 February 24 puts for $0.20 in less than 30 seconds on Friday. The volume was more than 9.5 times higher than the strike's open interest at the start of the session

NAV rose 1.38 percent on Friday to close the week at $26.45, just below its 50-day moving average. The manufacturer of military trucks gapped lower after its last earnings report in December but bounced sharply at the $20 level and is now trading at its highest level since July.

Friday's put seller is looking for NAV to stay above $24 through expiration on Feb. 15. If shares are below that strike price, the trader will face the obligation to buy shares at an effective price of $23.80 when the credit from the put sale is factored in. (See our Education section)

The put selling pushed total option volume in the name above 9,000 contracts, more than triple its daily average in the last month.

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