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Traders see Hologic pullback as brief

David Russell (david.russell@optionmonster.com)

Hologic dipped below $22 today, but traders apparently don't think that it will stay there long.

optionMONSTER's tracking programs detected the sale of more than 2,600 April 22 puts for $0.60 and $0.55 against open interest of just 45 contracts. Premiums fell as the transactions crossed, which reflects the selling pressure.

Those investors are now on the hook to buy shares in the medical-diagnostics company for $22 if they're below that level on expiration. Including the credit earned, however, their entry price would be $21.40 to $21.45.

Traders often sell puts when they like a stock because it lets them make money without expending cash. It also programs a buy order at a lower price, saving them the difficulty of managing an entry if they want to get long. (See our Education section for more on the strategy.)

HOLX is down 1.27 percent to $21.76 in late morning trading. While earnings have been mixed in recent quarters, the company has benefited from bullish sentiment in the health-care sector and research showing the benefits of its three-dimensional mammography devices.

Total option volume is more than 15 times greater than average in the name so far today.

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