Options Bulls Eye McKesson
McKesson pulled back to its 200-day moving average yesterday, and the bulls clambered to get on board.
optionMONSTER's Heat Seeker tracking system detected the purchase of about 7,000 August 82.50 calls against open interest of 3,425 contracts. Most of the large trades crossed our screens early for $0.30, but premiums climbed as high as $0.55 later in the day.
McKesson reversed higher after the calls started to trade and ended the session up 0.36 percent to $78.16 after touching $76.29 at one point. The stock has been in a steady uptrend since 2009, fueled by a secular boom in the business of managing prescription-drug benefits.
Earnings and revenue beat forecasts when the company issued results July 28. Management also raised full-year guidance.
The news briefly drove McKesson's shares higher, but they then continued to drop along with the rest of the market. Judging by yesterday's call buying, traders believe that it's time to get long once again.
Overall option volume was 6 times greater than average in the session, with calls outnumbering puts by the same amount.
—Russell has no positions in McKesson.
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David Russell is a reporter and writer for OptionMonster.