Teck Resources Limited (TCK) is an integrated mining company with operation in Canada. The stock is currently trading around $21.65 in a 52 week range of $19.98-$30.02. Shares of TCK have been underperforming the market this year with stock falling nearly 17% year to date. Options traders seem to think this trend will continue as orders hitting the tape today are decidedly bearish. Early in today’s trading session a trader bought 6,000 of the TCK May 20-18 put spreads for $0.33. This is a bearish trade that requires this trader to lay out nearly $200,000 in premium. This block also represents volume over 6 times the average daily option volume in TCK. With shares of TCK trading well below the Ichimoku Cloud and a downward sloping future cloud we believe that this bearish order flow in TCK can justify a short position.
Trade: Buying the TCK May 20-18 Put Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $19.70
James Ramelli
http://keeneonthemarket.com
