Potash (Potash Corp. of Saskatchewan) has been beaten down for months but climbed Wednesday, and options are betting that the stock will go higher.
The Canadian firm may not be a household name, but it's the world's largest fertilizer company. So its stock has understandably gotten some attention lately, as shares are $8 off their recent multi-year low of $54.80 and almost $180 below the 52-week high of $241.62.
- Potash: Complete Options Chain
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The precipitous fall hasn't escaped the attention of options traders. Today 32,000 calls are trading against 10,000 puts, a ratio that is nearly three times normal as POT trades up 5.1 percent to $62.35. And with premiums running near record highs, OptionMonster's tracking systems show someone big stepping in and buying the March 75-95 bull call spread some 5,000 times.
The net paid for that $20 spread was $4.40, so $2.2 million was plunked down on a bet that POT recovers to $95 or higher by the time the contracts expire on the third Friday of March.
Potash competes with:
- Terra Industries
Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.