Options Trading News

June 28, 2013  Fri 11:34 AM CT

Someone expects better news when Athenahealth reports earnings in about two weeks.

The medical-billing company fell hard on May 3 after issuing a weak guidance. It's been shuffling in a range since, but trying to work its way higher over the last month.

optionMONSTER's tracking programs detected the sale of almost 1,300 July 80 puts for $1.26 to $1.28. Previous open interest stood at just 748 contracts when the session began, which indicates that new positions were initiated.

The investor is now on the hook to buy shares for $80 if they close below that level on expiration. Above that price, he or she keeps the premium and the puts will expire worthless. (See our Education section for more on short puts.)

ATHN is down 2.08 percent to $86.07 in afternoon trading. The company hasn't yet officially announced the date of its next earnings release, but last year's calendar suggests it will occur around July 15--before today's puts expire.

The shares would also have to break support at both its 200-day moving average and the $85 level where it consolidated in May for the investor to lose money on the short puts.

Total option volume is almost 6 times greater than average so far today.
Share this article with your friends


Premium Services

Education & Strategy

Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »