Omnicare trader expects sharp move
David Russell | [email protected]
optionMONSTER's tracking programs detected the purchase of 2,500 March 36 puts for $2.35. A block of 2,500 March 36 calls was bought at the same time for $1.70, resulting in a combined cost of $4.05.
Known as a long straddle, the trade is designed to profit from a sharp move in either direction. It also stands to make money from implied volatility increasing because that would drive up the value of the options. (See our Education section)
OCR, which rose 0.45 percent to $35.68 yesterday, has been slowly grinding higher for the last two years. The pharmaceutical stock is now attempting to break above a key level from late 2006 and early 2007. That could be leading some chart watchers to believe that the stock will rally hard if it succeeds or tank if it fails.
Total option volume in the name was triple its daily average in the session.