Why one trader is selling HCA puts
Mike Yamamoto | firstname.lastname@example.org
optionMONSTER's tracking systems detected the sale of 2,500 April 34 puts in one print for $0.80 yesterday. Open interest in the strike was just 30 contracts before the session began, clearly showing that this is a new position.
The put seller is betting that HCA will hold above the $34 strike price by expiration in mid-April. If the stock falls below that level, the trader will face the obligation to shares at an effective price of $33.20 when the credit from the put sale is included. (See our Education section)
HCA rose 1.22 percent to close at $35.64 yesterday but is down more than 6 percent since coming into the month above $38. The hospital operator spiked to an all-time high of $39.60 on Feb. 5 when it released fourth-quarter results, but the stock has been declining ever since.