Bears want to take bite out of Thoratec
David Russell | [email protected]
optionMONSTER's Depth Charge monitoring program detected the purchase of 1,500 August 31 puts for $1.45 to $1.53. Volume was more than 200 times previous positioning at the strike, indicating that positions were opened.
Puts lock in the price where shares can be sold, which gives them a strong inverse relationship to the stock price. Investors use them to hedge against declines or to speculate to the downside. (See our Education section for more about how to boost your returns with the leveraging power of options.)
THOR is down 1.98 percent to $31.72 in afternoon trading. The maker of heart devices gapped lower on May 3 after earnings and revenue missed expectations. It tried to limp higher in the last month but is now slamming into resistance as the 50-day moving average comes swooping down.
Total option volume is twice the daily average so far in the session, according to the Depth Charge. Puts outnumbered calls by 35 to 1.