U.S. Markets open in 27 mins

Trade sees floor under LyondellBasell

Chris McKhann (chris.mckhann@optionmonster.com)

LyondellBasell is down with the overall market today, but one trader apparently believes that further downside will be limited for the chemical company.

More than 10,000 LYB options change hands this morning, compared to a daily average of 2,100 in the last month. Dominating that action are the September 55 puts, where a trader sold 9,008 contracts for the bid price of $3.80, optionMONSTER systems show. The volume was more than 3 times the strike's open interest before the session began, clearly indicating new activity.

The put selling is a bet that LYB will remain above $55 in the next five months. The trader is also taking on the risk of having to buy the stock if it falls below that level, though the effective purchase price would be $51.20 once the credit from the put sale is included. (See our Education section)

LYB is down 0.41 percent to $57.63 this morning. Shares were at a high above $65 a month ago and bounced off support at $55 last week. 

More From optionMONSTER