Tenet Healthcare is clawing its way back from a selloff today,
and one investor is looking for more upside.
optionMONSTER's Heat Seeker tracking system detected the purchase
of 10,000 November 6 calls for $0.82 and the sale of a matching
number of November 5 puts for $0.47. Volume was more than 11 times
open interest in both strikes.
THC fell 1.53 percent to $5.78 in morning trading and is down 8
percent in the last three sessions after retreating from $6.50, a
level that's been holding the hospital stock in check for more than
two years. The debt-laden company reported better-than-expected
earnings yesterday afternoon but its revenue slightly missed
The option strategy cost a net $0.35 to implement and will simulate
owning the shares, delivering leveraged gains on a move above $6
through expiration. If THC closes between $5 and $6, the investor
will only lose their $0.35 debit. Below $5, they face additional
losses because of the short interest in the puts.
The transaction occurred as the shares rebounded from a session low
of $5.66, a few cents above their 100-day moving average.
Overall options volume in THC rose to six times greater than
(Chart courtesy of tradeMONSTER)
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