A trader is betting that WellCare Health Plans will hold current levels for the next two months.
optionMONSTER's tracking systems detected the sale of 2,500 June 60 puts for the bid price of $2 yesterday. Open interest in the strike was just 131 contracts before the trade appeared, so it is clearly a new position.
The put seller will keep the $2 credit as profit as long as WCG stays above $60 through expiration in mid-June. If the stock falls below that strike price, the trader will be on the hook to buy shares at that level. (See our Education section)
WCG rose 0.76 percent yesterday to close at $63.59. The stock has been range-bound mostly between $62 and $68 for the last two months and has not closed below $60 since late February.
The health-care company, which provides services for government-sponsored medical programs, will report first-quarter results on May 8 before the market opens.
Yesterday's put sale made up almost all of WellCare's option volume in the session, which was more than 10 times its daily average for the last month.
More From optionMONSTER