What Bears are Seeing in W.R. Grace

W.R. Grace has been rallying along with most other chemical makers, but now the bears are stepping in.

OptionMonster's tracking systems detected the purchase of about 1,600 February 35 puts for $1.65. A matching number of February 30 puts was sold for $0.35 to $0.44 at about the same time, resulting in a net cost of about $1.20 to $1.30.

The trade, a bearish put spread, will earn more than 240 percent if the stock closes at or below $30 on expiration.

The stock touched an all-time high of $36.10 shortly after the open on Monday but ended the session down 0.14 percent to $35.67. The put spread occurred after the stock reversed at that high, which some chart watchers may consider evidence that the company is done rising for now.

The stock has rallied 50 percent in the last six months. Net income grew 24 percent the last time it reported earnings on Oct. 21, and management raised guidance for the full year amid strong demand from emerging markets.

Overall option volume in the name was 27 times greater than average in the session, with puts outnumbering calls by 5 to 1.

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David Russell is a reporter and writer for OptionMonster.