Potash (POT, $217.56, up $9.18) is another stock making a 52-week high today. I profiled this company back in mid-April and the May 200 calls. Potash is a volatile stock and one that can make 10-20 point moves on any given day. Today’s big move in Potash is a direct result of an analyst upgrade for Monsanto (MON, $138.16, up $6.56) which is also setting new highs.
The analyst who upgraded Monsanto said the company “will benefit from higher corn prices, larger planted acreage and strong market share.” Potash is a fertilizer that contains high amounts of essential plant nutrients and is used for corn, wheat, and vegetable crops. The upgrade is an indication that demand is still strong.
The May 200 calls that were profiled in April at $6.40 traded to a high of $25 in a little over a week’s time. That trade was a monster and the stock was in a “sweet spot” for option traders to ride Potash higher before earnings. We all know history loves to repeat itself, and traders are enjoying today’s return in the June 220 calls (PJNFD, $7.00, up $3.30) of nearly 90%. It may be too late to join this party but the July 240 calls (PJNGH, $6.17, up $1.87) look like they are taking reservations.