Bears want to put hurt on UnitedHealth

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UnitedHealth is lagging the market, and the bears apparently think that it's getting ready for a selloff.

optionMONSTER's Depth Charge tracking program detected the purchase of more than 2,200 June 57.50 puts for $4.10. Volume is more than 5 times open interest in the strike.

UNH is off 0.16 percent to $54.93 this afternoon, retreating from a four-year high around $56 established late last month. That was also roughly the same level where the stock peaked several times in 2007, which could be leading some chart watchers to believe that it will now serve as resistance.

The noteworthy thing about today's option activity is that the puts are in the money . That suggests they're being used as a bearish speculative play rather than as a hedge by an investor who owns the stock. (See our Education section)

The health-insurance giant has had a strong earnings history and repeatedly beaten estimates. But the industry tends to be considered a safe haven, which could make it unattractive as investor sentiment turns more bullish.

In addition, UNH had benefited from people using medical services less to save money. Now that employment and consumption patterns appear strong, however, that tide could now potentially shift against the company.

Overall option volume is still slightly below average in the name, but puts outnumber calls by 2 to 1.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: UNH

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