Options Trading News

September 20, 2016  Tue 7:16 AM CT


Community Health Systems has ripped higher in recent weeks, but one large trade is positioning for a possible drop.

optionMONSTER's monitoring program shows that 6,500 December 11 puts were purchased in one print for $1.15 today. This is clearly a new position, as open interest in the strike was just 202 contracts before the trade occurred.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

CYH fell 9.76 percent to $11.09 yesterday but is up 21 percent in the last month. The acute-care facility operator reported bearish quarterly results on Aug. 2 and is expected to release its next earnings numbers after the close on Oct. 31.

Overall option volume was 4 times greater than average in the name yesterday.

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Traders are selling September puts in the acute-care facility operator, the latest in a string of bullish option activity in recent months.


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