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


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »