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November 26, 2012  Mon 12:04 PM CT

UNH: SEE CHART GET CHAIN FIND STRATEGIES
UnitedHealth is down after a profit warning this morning, but one trader believes that the downside potential is limited.

optionMONSTER's tracking systems show that a trader sold 3,000 Weekly 52.50 puts for the bid price of $0.38. The volume was twice the strike's open interest at the start of the session, so it is a new position.

The put selling is a bet that UNH will hold up through the end of the week. The trader is also willing to get long shares if they are below the $52.50 strike price at that time but would have an effective buying price of $52.12, including the credit from the put sale. (See our Education section)

UNH is down 1.62 percent to $53.04 this afternoon. Shares of the health-care company have gained in each of the previous five sessions after bouncing off support at $51.
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Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

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