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Bulls seek quick pops in Ventas, HCP

David Russell (david.russell@optionmonster.com)

Nursing-home stocks have been pulling back, and yesterday buyers stepped in.

optionMONSTER's tracking programs detected a surge of call buying in Ventas and HCP, real-estate investment trusts that focus on senior housing and residential health-care properties.

VTR was active first, with 5,000 November 65s purchased for $0.20 to $0.25. Minutes later, HCP's November 45 calls traded 5,000 times for $0.15 and $0.20. Volume surpassed open interest in both, indicating that new positions were initiated.

Long calls lock in the price investors must pay to buy shares, so they can generate leverage when stocks rally. The noteworthy thing about yesterday's activity is that the transactions occurred in contracts that were close to the money and that expire at the end of next week. That indicates traders are looking for a move in the short term. (See our Education section)

VTR fell 1.50 percent to $63.23,and HCP shed 0.91 percent to close at $43.49. Both have been trending higher since late 2008 but have lagged in recent months. That could be leading some chart watchers to believe that the stocks are now at attractive entry points.

Overall option volume was more than 17 times greater than average in both companies, with calls outnumbering puts by more than 100 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)

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