Options Traders Bet on Mosaic Decline

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

Jon "DRJ" Najarian, co-founder of OptionMonster.

Mosaic(MOS Quote) is down sharply this afternoon along with strong downside options activity.

Mosaic averaged 6,500 puts traded each day in the last week, but today 26,000 of them changed hands in the first hour of trade alone. That included 13,200 contracts at the September 35 strike, where two blocks of 4,800 puts traded for $1.40 and $1.45.

The put volume was reminiscent of big action in mid-May, when the volume was also in September options but bullish at that time. You may recall that those buyers, who were purchasing way out-the-money calls and spreads, were wired -- meaning they were as right as anyone could be, almost as if they had tomorrow's newspaper.

Shares were $45 to $46 when they bought the September 55 and 60 calls as Mosaic was on its way to $59.34. Now that Mosaic is breaking down to $53, traders are buying the September 35 puts in an apparently bearish play.

Mosaic is down 6.7% in midday trading to $52.20.