A Spread Trade in Cerner Options

The last thing to take a look at is the fundamental story behind CERN and how it reminds people of the potential impact that a new presidential administration can have on a stock. CERN started 2008 at $56.40. It bottomed Nov. 20 at $31.58 before rallying back to its current level. Cerner's business is providing health care technology solutions. One of its product lines involves making people's medical records electronic. Could the investor be betting that an initiative by the Obama administration to make records electronic will benefit CERN? Perhaps.

Activity like this does not mean that people should run right out and buy shares of CERN. But it is an interesting case study in how at least one investor is using options to put on a risk profile that is different than just being long shares.

Jud Pyle is the chief investment strategist for Options News Network and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.