tradeMONSTER: Trade free for 90 days

Options Trading News

December 13, 2013  Fri 4:14 AM CT

DGX: SEE CHART GET CHAIN FIND STRATEGIES
Quest Diagnostics has been falling hard, and traders apparently expect the selling to continue.

optionMONSTER's Depth Charge monitoring program detected the purchase of some 12,800 May 45 calls, most of which priced for $0.80 and $0.85. Volume was more than 450 times the previous open interest at the strike, indicating that new positions were initiated.

Puts lock in the price where a stock can be sold no matter how far it might fall, letting traders position for potential downside in the share price. Because of their low cost, the contracts can also generate significant leverage if the stock does push lower. (See our Education section)

DGX fell 2.52 percent to $53.81 yesterday, its lowest closing price in 18 months. While typically a very slow-moving name, the medical-testing company has been selling off in the last week after rival Laboratory Corporation of America said that uncertainty about the Affordable Care Act and high deductibles was hurting business.

Overall option volume in DGX was 21 times greater than average the session, according to the Depth Charge. Puts accounted for a bearish 80 percent of the total.
Share this article with your friends


Related Stories

DGX

What's behind Quest put buying

December 5, 2014

Traders are positioning for a possible pullback in shares of the medical-testing company, which reached an all-time high this week.

Invest Like a Monster - Las Vegas: March 13-14

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER