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Leverage sought on Thermo Fisher

David Russell (david.russell@optionmonster.com)

One big investor is bullish on Thermo Fisher Scientific after a pullback in the maker of scientific equipment.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 September 125 calls for $5.40 and the sale of 2,500 September 110 puts for an average premium of $4.15. Volume was more than 13 times open interest at both strikes, indicating that new money was put to work on the long side.

Calls lock in the price where a stock can be purchased, while writing puts generates income in return for obligating the investor to buy shares if they drop. Combing the two strategies is highly bullish and results in a position that will track up to 250,000 shares, but at a fraction of the cost. (See our Education section for more on the leveraging power of options.)

TMO fell 1.08 percent to $119.35 yesterday, but is up 57 percent in the last year. It's been climbing on consistently strong results, and is now attempting to bounce at its January highs.

Overall option volume was quadruple the daily average, with that bullish combination trade accounting for two-thirds of the total.

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