Options Trading News

February 27, 2013  Wed 3:16 AM CT

HCA Holdings has been pulling back since reporting quarterly results earlier this month, but one trader apparently believes that the slide is coming to an end.

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.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. 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.

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