Options Traders Call Potash the "New Crude"

Is Canadian potash, as some analysts are postulating today, “the new crude?” One day after shares in the Potash Corp. of Saskatchewan (POT) soared to record highs on a tripling in the price paid for the coveted crop nutrient by Chinese buyers, the company’s stock price fell back about 3% to $192.22

The development follows news breaking during the Asian session that China will hike export tariffs on most fertilizers in a bid to keep ample supplies for Chinese growers at the height of the crop season. Implied volatility on Potash shares soared more than 18% on the session as option traders are now pricing in 22% more wiggle room than they has already been charted in the stock’s past trading behavior.

A trader’s market has emerged in the April 200 calls, with traders eagerly taking both sides of the bet as to whether Potash can pull off a close above $200 by Friday. Fresh and frisky two-way traffic is also observed at the May 220 strike, where the $6.00 price of the contract reflects a slightly better than 1-in-4 chance that Potash shares can breach the $220 mark over the next month.