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November 7, 2012  Wed 9:17 AM CT

THC: SEE CHART GET CHAIN FIND STRATEGIES
Tenet Healthcare is jumping this morning after President Obama's reelection, but one trader sees limited gains from here.

A trader sold 5,000 November 26 calls in a single print of $1.05 when the stock was trading at $26.40, according to optionMONSTER's tracking systems. The volume was more than 10 times the open interest at the start of the session, so this is a new opening position.

The calls were almost certainly sold against a long stock position because, if it weren't, this position would have huge upside risk. Traders often sell short term in-the-money calls if they see limited further upside and would like to sell their stock, but collect a premium to do so. The call selling also gives a slight cushion to the downside. (See our Education section)

THC is up 6.09 percent to $26.47. Although the hospital operator remains below its intraday highs from the first day of this month, it is on pace for its highest close in more than a year.
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The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

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