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UnitedHealth Bulls Return for More

By David Russell, reporter at OptionMonster

NEW YORK -- The bulls targeted UnitedHealth (UNH) for the second session in a row Tuesday.

OptionMonster's tracking programs detected the purchase of about 10,000 November 60 calls for 32 cents and 33 cents. Open interest in the strike was 7,305 contracts at the beginning of the day, indicating that new positions were initiated.

The calls lock in the price investors must pay to buy shares in the health-insurance giant. That gives them significant leverage in the event of a rally, but the contracts can expire worthless if the shares don't move.

UnitedHealth fell 0.64% to $56.18 Tuesday but has been holding support at its 200-day moving average after a so-so quarterly report last week. Investors purchased the November 55 calls on Monday also looking for a rally.

Overall option volume in the name was quadruple its daily average Tuesday, with calls accounting for a bullish 80% of the total.

Russell has no positions in UNH.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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