HCA has been pulling back after a surge last month, and the
bulls are checking in.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 2,000 September 27 calls for $1.40 and the sale of an
equal number of September 27 puts for $1.75. Volume was more than 7
times open interest at both strikes.
The trader collected a credit of $0.35 and will earn infinite
profits in the long calls if the hospital stock rallies. But if the
shares don't rise, he or she will face potential losses because of
the short puts.
A block of 3,000 August 26 calls was purchased for $1.30 less than
an hour later as another investor opened a bullish position as
HCA slipped 0.96 percent to $26.90 yesterday and has been grinding
in a range all year. It rallied on June 28 after the U.S. Supreme
Court upheld the Patient Protection and Affordable Care Act, which
is expected to reduce the industry's losses from unpaid hospital
bills, but has been drifting lower since.
The next big event on the calendar is the release of second-quarter
results on Aug. 6. The last earnings report beat expectations on
May 3, and management raised its full-year profit outlook.
I own HCA shares.