Community Health Systems has been falling since reporting earnings more than two weeks ago, and today it is drawing downside option activity.
optionMONSTER's Depth Charge system detected the purchase of 3,500 August 21 puts for $0.15 to $0.25. Open interest in the strike was just 47 contracts at the start of the session, indicating that these are new positions.
CYH is down 3.55 percent to $23.12 in morning trading, slipping below its 100-day moving average. In addition to drifting lower after its own earnings, the stock is down this morning after rival hospital operator HCA missed revenue expectations in the pre-market.
Today's put buying could be a hedge on a long position, though our systems have not identified any stock trades tied to the options today. It could also be a straightforward bearish bet as CYH declines in sympathy with HCA.
Either way, those long puts would be profitable if Community Health is down roughly 9 percent at expiration in less than two weeks.
Total option volume in the name is already 7 times its full-session average. All but 26 of the contracts are puts, a reflection of the day's bearish sentiment.
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