HCA trader issues healthy prognosis

Mike Yamamoto (mike.yamamoto@optionmonster.com)
January 29, 2013

HCA Holdings is off its recent all-time highs, but one large trade is betting that the health-care services company will resume rallying.

A block of 6,000 March 37.50 calls was bought for $1.80 this morning, according to optionMONSTER's Heat Seeker system. This is clearly a new position, as the strike's open interest was just 83 contracts before today's trading began.

The long calls , which lock in the price where traders can buy the stock, are looking for HCA to gain more than 6 percent by mid-March. These options could be sold earlier for a profit if their premiums rise with any rally before then, but they will expire worthless if the stock doesn't move. (See our Education section)

HCA is down 0.9 percent to $37.04 after reaching a lifetime intraday high of $38.07 on Friday. The stock has shot up this month since bouncing from support at $30 at the end of December, but it has hit resistance at $38 in the last week.

Today's call buying made up almost all of HCA's total option volume of 6,401 so far, already almost 5 times its daily average of 1,298 contracts in the last month. Only 334 puts have traded, a reflection of the session's bullish sentiment.

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