One big investor thinks that the fireworks are done in HCA
optionMONSTER's tracking systems detected the sale of 10,000 June
29 puts for $2.55 and 10,000 June 29 calls for $2.70. There was
barely any open interest in either strike before the activity
appeared, so this is a new position.
Known as a
, the trade generated a credit of $5.25, which the investor will
keep if HCA closes at $29 on expiration. The gains will erode on
either side of that level, turning to losses below $23.75 and above
HCA rose 1.48 percent to $28.82 yesterday and is up 29 percent in
the last month. The hospital operator was the target of bullish
call buying on
that was followed by a steady push higher in the next few weeks,
and those contracts have more than doubled in value.
The most recent pop came on Monday, when the company reported
better-than-expected fourth-quarter earnings and announced a $2
Given that it has already made a big move, some traders may think
that HCA will now shuffle sideways as its gains are consolidated.
section for more on
strategies that make money from the
passage of time
rather than a directional move.)
The short straddle pushed overall option volume in the name to 9
times greater than average in yesterday'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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