This trade should be considered slightly bearish POST and aggressively bearish volatility
Post holdings was trading 66.44, up .15, has an IV30 of 42.60 and an HV 10 of 51.30 saw a call spread trade today.? POST which has an ADV of 1200 and an open interest of 56,000 contracts saw a customer sell 5000 of the Jun 2016 75/90 call spreads at 3.32.? The customer paid 2.22 for the Jun 90s and sold the 75?s at 5.54.
The customer is hoping POST stays below 75 bucks a share for the next 6 plus months.? If it does he or she can pocket the credit.? The breakeven is 78.32.? This could in fact be a modified overweight against stock.? The customer trying to collect premium against a stock position, but not capping upside on long equity (above 90) in the event of a takeover or merger.
This trade should be considered slightly bearish POST and aggressively bearish volatility.