Volatility trade in Health Care REIT
David Russell | email@example.com
optionMONSTER's screeners detected the purchase of 2,000 October 57.50 calls for $0.90 and 2,000 October 57.50 puts for $0.80. Volume exceeded open interest at both strikes, indicating that new positions were implemented.
The trade cost $1.70 to open and will make money from volatility increasing in the slow-moving nursing-home stock. Option premiums have already been climbing as the shares retreat from an all-time high above $62 on Aug. 1.
HCN rose 0.96 percent to $57.68 yesterday. Known as a straddle, the option position will lose money if the stock remains between $55.80 and $59.20 through expiration, while earning profit outside that range. (See our Education section)
Some 4,500 contracts changed hands in the session, more than 7 times average for the name.