The Most Unusual Trade of the Day

January 4, 2017

Agriculture as a sector quietly turned around at the end of 2016. Take CF Industries CF – NYSE for instance.

After bottoming in August, CF consolidated sideways and then jumped 41.6% in less than two months to close the year.

Now firmly above the 200-day moving average, a sharp trader is looking for continued strength.

[Yesterday], this customer bought 5,000 CF May 40 calls.

Bottarelli Research Translation: At $1.25 per contract, this trader outlaid $625,000 in pure option premium. With a break-even price at expiration of $41.25, CF has to increase 29.4% for this trade to pay off. Less than two years ago, CF traded as high as $67.00. If CF can forge this colossal rally, our trader is primed to make $500,000 for every $1 shares rise above $41.25.

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Source: Bottarelli Research