Make or break time for Omnicare?

optionMONSTER

Omnicare has rallied back to a key level, and now traders are looking for a pop or a drop.

optionMONSTER's monitoring systems detected the purchase of 3,400 March 55 puts for $2.88 and 3,400 March 55 calls for $3.27. Volume was more than twice open interest at both strikes, indicating that new positions were initiated.

Known as a straddle , the transaction cost $7.15 to open and will make money from the health-care stock making a big move higher or lower. (See our Education section for other volatility strategies.)

OCR is up 0.34 percent to $55.51 this morning and has risen 55 percent in the last year. It's now back to the same level where it rolled over in late 2006, which could make some chart watchers expect a reversal lower or a breakout higher.

Total option volume is 30 times greater than average so far in the session, with that straddle accounting for almost all the activity.

More From optionMONSTER

View Comments (0)