Century Aluminum Draws Large Put Trade

By Chris McKhann , analyst at OptionMonster

MONTEREY, Calif. (TheStreet) -- Shares of Century Aluminum (CENX Quote) are up 1,000% from their March lows, but at least one trader is looking for the stock to give some of that back.

The stock tacked on 11.5%Thursday to close at $10.76, following Alcoa's(AA Quote) surge from its positive earnings surprise. That price is roughly 30% higher than just a week ago, but remains below the August and September highs of above $12.

OptionMonster's real-time systems show that more than 20,000 of the January 7.50 puts were bought, the largest block of 17,599 going for 60 cents. Open interest at the strike was just 1,730 contracts, so the trade was clearly opening new positions.

A large block of Century Aluminum stock traded at roughly the same time, so this could have been a directionally neutral trade based on the belief that volatility will increase.