Options Brief: Huntsman Corp. (HUN)

HUN – Huntsman Corp. – The manufacturer of chemical products popped up on our ‘hot by options volume’ market scanner in the first half of the trading session after one investor rolled a large long call position forward to a more bullish strike in the October contract. Huntsman’s shares rallied as much as 1.05% at the open to touch an intraday high of $10.72 before sliding down to a low of $10.48. Shares recovered somewhat by 11:50 am ET to stand 0.40% higher on the day at $10.65. It looks like the HUN-bull originally accumulated approximately 12,800 calls at the September $9.0 strike for an average premium of $0.79 apiece starting on August 17, 2010, when shares were trading around $9.55 each. The subsequent rally in the price of the underlying stock lifted premium on the September $9.0 strike calls, allowing the investor to sell 12,832 contracts today at a premium of $1.65 apiece. Average net profits on this leg of the transaction amount to $0.86 per contract. Next, the investor extended optimism on the chemical company by purchasing 12,832 calls at the higher October $10 strike for an average premium of $0.90 each. Profits on the new position start to accrue if Huntsman’s shares rally 2.35% to surpass the breakeven point of $10.90 by October expiration. Other signs of bullish sentiment also took place at the October $10 strike where investors sold 1,100 puts to pocket premium of $0.25 apiece. Put sellers keep the full premium received as long as shares exceed $10.00 through expiration next month. Investors short the puts are apparently happy to have shares of the underlying stock put to them at an effective price of $9.75 should the puts land in-the-money at expiration.