OptionsHouse

Options Trading News

August 28, 2013  Wed 3:16 AM CT

BSX: SEE CHART GET CHAIN FIND STRATEGIES
Traders are buying the pullback in Boston Scientific.

optionMONSTER's Heat Seeker monitoring system detected the purchase of about 2,500 January 12 calls for $0.40. A matching number of January 10 puts was sold at the same time for $0.43, resulting in a credit of $0.03.

Owning calls locks in the price where shares can be purchased in the medical-device company, while selling puts creates an obligation to buy them in the event of a drop. Combining the two strategies lets the investor cheaply position for upside, while also programming a buy order below the current range. Like owning stock, the position has downside risk. (See our Education section for more on the risks and benefits of short puts.)

BSX declined 5.14 percent to $10.70 yesterday as the broader market retreated. It's up 87 percent so far this year, fueled by strong earnings reports. The stock gapped to its highest level in almost four years after its last quarterly release on July 25.

Total option volume in the name was 8 times greater than average in the session, according to the Heat Seeker.
Share this article with your friends


Related Stories

BSX

Calls follow uptrend in Boston Scientific

June 14, 2016

The medical-device manufacturer has rallied 28 percent in the last three months, and traders are looking for the bullish momentum to continue.

BSX

Call buyers return to Boston Scientific

May 27, 2016

Traders are snapping up calls for the second day in a row in the cardiac-device manufacturer, which is up 31 percent in the last three months.

OptionsHouse

Premium Services

Education & Strategy

The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

View more education articles »