Bulls Check Into Community Health

By Pete Najarian, co-founder of OptionMonster. P/>NEW YORK (OptionMonster) -- Community Health Systems (CYH) is attracting upside option buying ahead of an industry conference next week and earnings results later this month.

Although Thursday's option activity wasn't off the charts, it was clearly bullish and accelerated in the final hour of the session. About 2,500 March 21 calls traded in a strong buying pattern for 70 cents to 80 cents, according to OptionMonster's real-time tracking systems.

The volume was well above the open interest of just 229 contracts coming into the session, so these were new positions. The total option tally in the name was five times its daily average, with calls outpacing puts by 11 to 1.

The stock closed Thursday down fractionally at $19.85. The hospital operator's shares have rebounded from their December lows near $16 and have moved up with the broader market.

For the calls purchased Thursday to turn a profit, the stock would need to gain roughly 10% before the options expire in mid-March.

The company will participate in the Leerink Swann 2012 Global Healthcare Conference scheduled for Feb. 15-16 in New York and then report fourth-quarter results on Feb. 21.

Najarian has no positions in CYH.

>To order reprints of this article, click here: Reprints