Why trader is selling puts in WellCare
Mike Yamamoto | email@example.com
optionMONSTER's tracking systems detected the sale of 2,000 September 50 puts in one print for $2.15. This is clearly a new position, as the open interest in the strike was a mere 57 contracts before the trade appeared.
The put seller is looking for WCG to stay above the $50 strike price through expiration in mid-September. The trader will face the obligation to buy shares if they fall below that level, though the effective price would be $47.85 once the $2.15 credit from the put sale is included. (See our Education section)
WCG lost 1.54 percent yesterday to close at $56.38, having faced resistance at its 50-day moving average for the last three weeks. The health-care provider beat revenue forecasts and raised guidance in its first-quarter report on Friday, but earnings missed esimates.
Total option volume in the name was more than 8 times its daily average for the last month.