Traders are looking for Boston Scientific to resume its recent rebound.
Boston Scientific rose 1.36 percent yesterday to close at $5.97. Shares of the slow-moving medical-device company rallied from a long-term low of $5 to $6 between mid-December and mid-January and have been consolidating since then.
OptionMonster’s tracking systems show that 5,450 March 6 calls changed hands yesterday, compared with previous open interest of 2,056 contracts at that strike. The options traded in a heavy buying pattern for premiums of $0.20 to $0.25.
Purchased calls lock in the price that traders must pay to buy the underlying shares. These options can provide significant leverage if the stock rallies, but they will expire worthless if it does not.
For the calls bought yesterday to turn a profit, the stock would need to gain at least 4 percent by expiration in mid-March.
—Russell has no positions in BSX.
Additional News: Moody’s Upgrades Boston Scientific On Cost-Cutting
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David Russell is a reporter and writer for OptionMonster.