Medtronic receives a show of support

By optionMONSTER,  April 26, 2012, 04:49:14 AM EDT

One investor thinks Medtronic is on solid ground.

optionMONSTER's tracking programs detected the sale of 22,000 June 34 puts for $0.32. Volume was more than 170 times open interest in the strike.

The investor is now obligated to buy shares in the medical-device company if they close below $34 on expiration. If they don't, he or she will keep the credit as the contracts expire worthless.

The trader may feel comfortable with that wager because MDT appears to have significant support above that strike price. The stock peaked around $37 in early December and continues to hold that level. Its 200-day moving average is also around $36.

Investors often sell puts when they like a stock because it gives them the chance to make money without spending capital. (See our Education section)

MDT rose 0.22 percent to $37.20 yesterday. Overall option volume was 7 times greater than average 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.


This article appears in: Investing, Options

Referenced Stocks: MDT



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