Credit: Shutterstock photoStryker has been consolidating for months, and one big trader apparently thinks that it's on solid ground.
optionMONSTER's tracking programs detected the sale of 2,800 April 92.50 puts for $1.50 on Friday. Volume was more than 70 times previous open interest, which indicates a new position was initiated.
These short puts obligate the trader to buy shares in the medical-products company for $92.50 if it's under that level on expiration. Above it, they'll keep the premium and the contracts will expire worthless. (See our Education section.)
SYK rose 0.37 percent to $94.75 on Friday. It bottomed around $78 in October, rallied toward $98 by December, and has been in a range since. Shares have climbed steadily for years amid growing demand for the company's replacement joints and surgical tools, and the last two earnings reports beat estimates.
There was also a bullish trade earlier in the month , entailing the sale of June 80 puts and the purchase of June 95 calls. Shares have worked higher since, and are now back above their 50-day moving average. That could make some chart watchers think that they're ready to continue higher.
Friday's put seller is essentially betting the SYK will remain above the middle of its recent range, but will make money as long as it stays over $91 because of the premium received.
Total option volume was almost triple the daily average in the session.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
