As LifePoint Hospitals nears a key support level, traders are looking for a rebound by Thanksgiving.
optionMONSTER's Heat Seeker tracking system detected the purchase of 1,845 November 50 calls yesterday, led by a block of 1,750 that went for $1.95. This is clearly fresh buying, as open interest in the strike was just 115 contracts before the trades appeared.
These long calls , which lock in the purchase price for the stock, are betting that LPNT will really by mid-November. The contracts could be sold earlier if premiums rise with a rally before then, but they could expire worthless if shares remain below $50. (See our Education section)
LPNT fell 0.84 percent yesterday to close at $48.18, not far from support above the $47 level in place since late April. The company, which operates acute-care hospitals, was trading above $51 earlier last month but missed second-quarter estimates and lowered earnings guidance on July 26.
Yesterday's call buying made up almost all of the option volume in LPNT, which has averaged a mere 14 contracts a day for the last month. Only 2 puts were traded in the session, further reflection of the day's bullish sentiment.
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