UnitedHeath is heading lower today, but one trader apparently believes that further downside will be limited.
A block of 3,000 September 50 puts was sold for $1.79, according to optionMONSTER systems. This is clearly a new position, as its volume was more than 3 times higher than the strike's open interest before today's trading began.
The put selling is a bet that UNH will hold above $50 in the next six months. If it falls below that strike price, the trader will face the obligation to buy shares at that level. (See our Education section)
UNH is down 0.6 percent to $54.17 this morning. The health-benefits company tested resistance at $58 a month ago and hasn't traded below $50 since December 2011.
More From optionMONSTER
- Cramer: Enemies of wealth creation
- Aeropostale sinks on weak outlook
- Stock indexes pause after broad gains
- Investment & Company Information