VALE – Vale – Two-opposite minded options strategists initiated spreads on the iron-ore producer today. One of the investors displayed bearish sentiment on the stock by purchasing a plain-vanilla debit put spread, while the other options player put forth an optimistic stance on Vale by enacting a bullish risk reversal. Vale’s shares are up 0.70% to stand at $27.40 as of 3:40 pm (ET). The Vale-bear initiated a debit put spread, buying 7,500 lots at the September $25 strike for a premium of $1.36 apiece, and selling the same number of puts at the lower September $20 strike for $0.40 in premium per contract. The net cost of the transaction amounts to $0.96 per contract and prepares the investor to profit if Vale’s shares fall 12.25% from the current price to breach the effective breakeven point on the spread at $24.04. The put-spreader pockets maximum potential profits of $4.04 per contract if the iron ore producer’s shares plunge 27% to trade below $20.00 by expiration day in September. In contrast to the bearish trade in the September contract, an investor touting a rosier outlook enacted a bullish risk reversal by selling 11,000 puts at the August $25 strike for $1.00 each, and by purchasing the same number of calls at the higher August $29 strike for $0.95 apiece. The risk reversal strategy in this case yields a net credit of $0.05 per contract to the responsible party, who keeps the full credit received as long as Vale’s shares exceed $25.00 through August expiration day. Additional profits are available to the risk reversal player if VALE’s shares rally more than 5.8% to surpass $29.00 by expiration.