Options Traders Predict Tenet to Jump

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

David Russell, reporter for OptionMonster.

Options traders are piling into calls of Tenet Healthcare(THC Quote), betting that the hospital company will rally another 20% by mid-June.

Volume in the June 4 calls surged to 5,359 against open interest of 468, according to OptionMonster's monitoring systems. The calls changed hands for 10 cents to 15 cents, with purchases accounting for most of the volume.

Tenet Healthcare is up 4.5% to $3.26 in afternoon trading and up 60% in the last month. The company has been rallying along with peers such as Health Management Associates(HMA Quote) as investors hunt for value among highly leveraged and inexpensive stocks in the hospital industry. Tenet Healthcare was also recently upgraded by Goldman Sachs(GS Quote) and Barclays(BCS Quote).

Calls outnumbered puts in Tenet Healthcare today by 9 to 1, reflecting a broadly bullish sentiment.