Traders are looking for Stillwater Mining to rally by midyear.

optionMONSTER's tracking systems detected the purchase of 2,000 July 16 calls for $0.88 and the sale of 2,000 July 12 puts for $0.43 yesterday. Both transactions occurred at the same second, so this is a combination trade.

This strategy is highly bullish because a rally would boost the price of the long calls while decreasing the value of the puts that were sold . But the opposite will occur if the stock drops, and the trader will be on the hook to buy shares if they fall below $12 by expiration in mid-July. (See our Education section)

The trade follows July 16 call buying in Stillwater cited on our InsideOptions Pro service back on Dec. 17 , three sessions after bullish activity in the same strike.

SWC gained 2.99 percent to close at $14.79 yesterday. The platinum producer pulled back from December highs above $15 but found support around $13 and has been moving higher since. The company reported strong earnings on Feb. 20.

The combination trade pushed total SWC option volume to 6 times its daily average for the last month.


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