McKesson has been steadily pushing higher since last summer, but one investor wants to hedge against a drop.
optionMONSTER's Depth Charge tracking system detected the purchase of more than 2,500 June 85 puts against open interest of just 110 contracts. While put buying is often bearish, yesterday's trades occurred as the stock pushed higher, suggesting they're being used as downside protection rather than a downside bet.
That caused premiums to decline from $2.15 to $1.85 and then $1.80 because puts are valued inversely to shares. (See our Education section)
MCK finished the day up 0.8 percent to $84.87 after having opened more than 1 percent lower. The company has been riding a secular growth boom among providers of pharmaceutical benefits, which health insurers hire to steer people into cheaper medicines.
Its last earnings report on May 3 beat forecasts on both the top and bottom lines, and investors expect the strong results to continue as more big drugs such as Lipitor go generic.
It touched a 12-year high of $87.32 last week before dropping along with the rest of the market on Monday. The shares then bounced after finding support at their 30-day moving average. Some chart watchers may consider that evidence it remains in a bullish trend.
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