By Jud Pyle, CFA, chief investment strategist for the Options News Network

Shares of Potash ( POT) have rallied nearly 6% so far on a down market day and normal daily options volume has doubled, but this volume is not heading in one direction.

Approximately 34,000 Potash options contracts normally trade daily across all strikes, but around 63,000 contracts have changed hands so far today. The bulk of that volume traded in calls throughout the July expiration month.

An investor bought 10,000 July 110 calls for 80 cents per contract, sold July 120 calls 20,000 times for 20 cents each and bought 10,000 July 130 calls for 15 cents a contract with Potash stock trading around $96.25 a share. This is a bullish trade because the investor makes the most money if the stock is right at $120 at July expiration and does not get into the black until the stock is above $110.55, which is a rally of over 15% in two weeks. But note that it is not as bullish as if all 40,000 of the contracts in this spread had been on the buy side.

Fertilizer stocks like Potash seem to be going into the holiday weekend on a high note after Uralkali, Russia's second-largest potash producer, raised its prices on improving demand. In addition, an analyst from K+S's fertilizer unit said the farming industry should see prices rise to levels they can work with. Add to that speculation that unofficial results from an Indian fertilizer tender are showing flat year-on-year pricing and you have the makings for a move higher today.

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