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Time is money for strategy in RadNet

David Russell (david.russell@optionmonster.com)

One investor is turning time into money with RadNet.

optionMONSTER's monitoring programs detected a surge of activity in the thinly traded medical-diagnostics company. It began with a large block of September 2.50 calls being purchased for $0.40 against previous open interest and, seconds later, the December 2.50 calls were sold for $0.50. An even 4,322 contracts traded in each strike.

It appears that the investor had previously sold the September options and is now rolling that short position forward in time. He or she probably owns shares and is using the options as part of a covered call strategy. As a result of the transaction, the investor collected $0.10 of income but while locking into the trade for an additional three months. (See our Education Section.)

RDNT is up fracdtionally $2.86 in midday trading and has been bouncing in a range for years. Its implied volatility is elevated at more than 90 percent, which increases the appeal of selling options.

More than 8,600 contracts have traded in the name so far, compared with an average of less than 20 in a typical session.

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