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Traders see ceiling in Tempur Sealy

Chris McKhann (chris.mckhann@optionmonster.com)

Traders see limited upside in mattress maker Tempur Sealy.

Just over 4,100 November 45 calls traded yesterday, led by a block of 3,370 that was sold for $0.90, according to optionMONSTER systems. Volume is well above the strike's previous open interest of just 770 contracts, showing that it is fresh activity.

The call selling is a bet that TPX won't see much upside $45. The contracts could have been sold naked with an initial bearish bias, but it is more likely that they were traded against long shares in a covered-call strategy . The latter would be bullish up to the strike price but not beyond. (See our Education section)

TPX rose 3.62 percent yesterday to close at $40.39, about the middle of a range that goes back to May. Shares were testing resistance at $45 from mid-September through the beginning of October.

More than 8,200 TPX options have changed hands, nearly 4 times its daily average for the last month.

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