Bull hunts for rebound in Tenet

By David Russell,

Shutterstock photo

Tenet Healthcare is clawing its way back from a selloff today, and one investor is looking for more upside.

THC Chart 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 forecasts.

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 average.

(Chart courtesy of tradeMONSTER)

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

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This article appears in: Investing Options
Referenced Stocks: THC

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