How the bulls are sticking with HCA

By
A A A
Share |

One investor is adjusting a bullish trade in HCA, staying with the hospital operator through late autumn.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,000 November 40 calls for $1.97 and the sale of an equal number of November 36 puts for $0.90. Equal-sized blocks traded in the August 36 puts, bought for $0.08, and the August 37 calls, sold for $1.95, but volume was below open interest in those.

This suggests that the investor had previously sold the August puts and bought the August calls as part of a bullish combination strategy, which is similar to owning shares. With today's transaction, he or she extended that wager by three months and collected a credit of $0.80.

HCA is down 2.17 percent to $38.70 in morning trading. It roughly doubled between early 2012 and the start of this year but has been consolidating in a range since. The last set of quarterly numbers beat expectations as patient admissions increased.

Adjusting the bullish combination today also gives the investor more time for the stock to move and reduces the risk of being assigned shares on a drop below $36. (See our Education section for more on put selling .)

Total option volume is 5 times greater than average so far in the session.



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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: HCA

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

60%

Most Active by Volume

74,972,696
  • $16.29 ▲ 1.24%
58,110,176
  • $63.0301 ▲ 2.92%
52,113,540
  • $4.30 ▲ 4.37%
45,053,607
  • $26.18 ▲ 3.40%
40,556,519
  • $3.22 ▲ 0.94%
33,697,770
  • $50.83 ▲ 1.90%
33,642,638
  • $4.56 ▲ 2.01%
31,530,460
  • $20.06 ▲ 11.88%
As of 4/22/2014, 04:07 PM