Aggressively Bearish on?POT volatility
Potash Corp of Saskatchewan currently trading 25.82 down .55 with an IV30 of 26.51 up 2.3% saw a large put ratio spread trade.? A trader bought 2500 of the Jan 25 puts for 1.57 and against it he or she sold 10,000 of the Jan 23 puts at .81 creating a 1 by 4 put spread for a nice net credit of 1.67 a spread.? The trader is basically betting that there might be SOME Downside to POT over the next few months, but nothing substantial.? And, if the stock sits or rallies he or she can keep the credit.
POT has an ADV of just over 7500 contracts a day. Today it has done just under 39,000 almost all of them puts which are outpacing calls by a ratio of more than 16 to 1.
This is a sharp type trade and is likely meant to be income producing with some potential for a home run.? It should be considered neutral the stock and aggressively bearish volatility.