Credit: Laboratory Corporation of America is breaking out to new all-time highs, and the bulls are looking for a continued rally.
optionMONSTER's Heat Seeker tracking system detected the purchase about 3,400 August 85 calls against open interest of 115 contracts. Most of the volume priced for $1.85.
LH rose 2.08 percent to $81.91 in morning trading and is up 9 percent in the last month. The provider of medical-testing services popped higher Monday after it was rumored that Merck could buy larger rival Quest Diagnostics.
LH is climbing again today after reporting first-quarter earnings slightly below analysts' forecasts, though investors may be giving the company some leeway after unusually heavy snowstorms reduced patient traffic.
The shares spent four months consolidating around $76, but have now surged above their previous highs established in mid-2007. They must appreciate 6 percent for the calls purchased today to turn a profit.
Overall options volume in LH is fives times greater than average so far in the session, with calls outnumbering puts by 22 to 1.
(Chart courtesy of tradeMONSTER)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
