Options Trading News

February 5, 2013  Tue 10:19 AM CT

Thoratec is drawing upside option activity ahead of its earnings release after today's close.

optionMONSTER's Heat Seeker system shows that more than 3,000 March 40 calls traded this morning in a strong buying pattern, led by a block of 2,194 that went the ask price of $0.75. Open interest in the strike was just 13 contracts before today's trading began, clearly showing that this is new activity.

THOR is off a penny at $36.80 this morning. The heart-device maker issued strong results in its last quarterly report in November and hit a 52-week high just shy of $40 the next month, but shares have been trending lower since then and have slipped below their 50-day moving average, according to researchLAB.

Today's long calls, which lock in the price where traders can buy the stock, are betting that THOR will gain roughly 11 percent or more by mid-March. These options could be sold earlier at a profit if they rise in value with any rally before then, but they will expire worthless if the stock doesn't move by that time.

The calls made up almost all of the 3,444 total options that have traded so far in the name today, more than 30 times its daily average. Only 214 puts have changed hands at all strikes, a reflection of the session's bullish sentiment.
Share this article with your friends

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

Premium Services

Education & Strategy

Investor deficiency in premium collection

Most investors have heard about selling options as a form of income generation. You hear it from brokers and financial advisors as a way to generate income without selling off pieces of your nest egg, dwindling through your retirement accounts, and then being stuck figuring out how to financially afford the rest of your life...

View more education articles »