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United Rentals gets vote of confidence

Mike Yamamoto (mike.yamamoto@optionmonster.com)

United Rentals is bouncing back to its recent highs, and one trader is betting that the stock will hold onto those gains for the rest of the year.

optionMONSTER's tracking systems detected the sale of 2,450 December 55 puts at the same time today for $4.50. This is clearly a new position, as open interest in the strike was a mere 43 contracts before the trade appeared.

The put seller will keep the $4.50 credit as profit if URI closes above $55 at expiration in mid-December. The trader will be on the hook to buy shares if they fall below that level for an effective price of $50.50, but that may be part of the strategy because investors sometimes sell puts in this way with the hope of picking up stock at a discount . (See our Education section)

URI is up 2.5 percent to $56.54 today. Shares of the equipment-rental company bounced sharply around $54 on Monday and are now at a resistance level tested earlier this month after its last earnings report on July 17.

Total option volume in the name so far today is already 42 percent higher than its full-session average for the last month.

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