Thoratec receives vote of confidence

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Thoratec spent months quietly sliding lower, but on Thursday it woke up.

The maker of heart devices rallied 4.51 percent to $37.50, steadily climbing into the closing bell. It was also the busiest volume day in more than a month, despite muted activity in the broader market one day before the holiday weekend.

One big options trade stood out as an investor sold about 2,000 May 35 puts against open interest of just 8 contracts. The first blocks priced for $1.20, and then premiums fell as low as $1.05 as the selling pressure intensified.

He or she is now on the hook to buy THOR shares for $35 if they close below that level on expiration, but including the credit received their entry price would be below $34. Should it remain above the strike, they'll keep the premium as profit and the puts will expire worthless. See our Education Section for more on put selling .

The stock has been steadily climbing for the last decade, and now appears to be finding support around the same $36 level that was resistance in 2011 and 2012. That could make some traders think it's ready to make a move higher.

Total option volume was more than 10 times greater than average in Thursday's 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.

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This article appears in: Investing , Options

Referenced Stocks: THOR

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