OptionsHouse

Options Trading News

December 15, 2011  Thu 10:46 AM CT

HCA: SEE CHART GET CHAIN FIND STRATEGIES
One trader is bullish on HCA Holdings as it bounces at a potential support level.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,500 March 22.50 calls for $1.50 and the sale of an equal number of March 20 puts for $1.65. The trade pushed total option volume in the hospital operator to almost triple the daily average.

The transaction resulted in a credit of $0.15 and is similar to owning shares but less sensitive to changes in the stock price. It needs a push above $22.50 to earn profits, and won't lose money if the shares remain above $20.

It's similar to activity we saw yesterday, when traders made low-cost wagers with perceived low risk. They're less likely to pay off, coming amid a market where most stocks are tracking the broader market and failing to attract significant investor interest.

HCA is trading at $20.86, up 1.26 percent on the day. The shares peaked around $20 in late August and September before ripping higher in October and November. Some investors may think that this level will now provide support, which could help explain why they the puts were sold at the 20 strike today.
Share this article with your friends


Related Stories

HCA

Bulls keep coming back to HCA

May 29, 2015

The hospital operator beat earnings estimates the last time results came out, and revenue was better than expected in the two most recent quarters.

HCA

Traders are rolling higher with HCA

May 14, 2015

Traders are extending bullish positions in the hospital operator, which beat earnings and revenue estimates on May 5 thanks to higher admissions.

Invest Like a Monster - San Diego: June 26-27

Premium Services

Archived Webinar

Education & Strategy

Long synthetic call

Long and short Synthetic stock are two of the six basic synthetic positions that exist. Number three on our list is the Synthetic Long Call...

View more education articles »