HCA has been consolidating after a big move, and one investor
wants time for it to rally again.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 2,000 September 41 calls for $1.56 and the sale of a
matching number of September 35 puts for $1.33. A related trade
occurred at the same time in the June 40.50 calls, which were sold
for $0.42, and the June 33.50 puts bought for $0.19. There was no
cost aside from commissions.
Volume was below open interest in June but not September, which
suggests that an existing position was closed and rolled forward in
time. The strategy is bullish, with a strong correlation to the
hospital company's stock.
locks in the price where shares can be purchased, while
creates an obligation to buy if they drop. Combining the two lets
the investor fund a long bet by writing insurance on the stock. The
strategy stands to generate significant leverage if the trader is
right about the direction. (See our
HCA fell 2.28 percent to $38.20 yesterday. It's up more than 50
percent in the last year but has been stalling on either side of
$40 since early April.
Yesterday's bullish trade pushed total option volume to 9 times
greater than average in the session, according to the Heat Seeker.
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