Using PowerOptions tools to search for companies with unusual option activity yesterday revealed healthcare company Humana (HUM), auto part manufacturer (MTOR) and Internet content delivery company Akamai (AKAM).
Healthcare related company Humana had significant put and call option activity yesterday. Three call options with high volume for Humana were the 2012 Jul 75, the 2012 Jul 80 and the 2012 Jun 80. On the put option side, the 2012 Jul 72.5 and the 2012 Jul 77.5 were seeing a lot of activity.
On the news front, the only news related to the company was an announcement of participation in the Jefferies 2012 Global Healthcare Conference to be held on Wednesday, June 6, 2012.
Humana's stock price has taken a pretty big haircut recently as shown below:
Humana's stock price is blow its 200 day moving average, but hasn't dropped to its previous support level in the $65 range. A protected covered call, selling a call option against a stock and using some of the proceeds from selling the call option to purchase a protective put option, might be considered. Using PowerOptions tools, a protected covered call was found for Humana for July with a potential return of 2.2% and a maximum potential loss of 8.9%.
Auto part manufacturer Meritor had significant option activity for the 2012 Jun 6 call option.
No major news for the company. Meritor's stock price is near its previous support level in the $5 range as shown below:
Using PowerOptions, a November married put was found for Meritor with a maximum potential loss of 6.4%. A married put may be entered by purchasing a put option against a stock. The position has unlimited upside and limited downside. The specific put option to purchase is the 2012 Nov 7 at $0.48.
Internet content delivery company Akamai, discussed in this article, experienced significant option activity related to the 2012 Jun 30 put option.
Akamai announced the Terra Cloud Catalyst yesterday for delivering secure content to any device. Akamai was also upgraded from "neutral" to "buy" by B. Riley.
Akamai's stock price has taken a hit recently and is near its 200 day moving average and near its previous support level in the $26 range as shown below:
A bull-put credit spread as mentioned in the previous article, still looks attractive for the Akamai, although the position should be considered cautiously.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.