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Bulls Pile Into CareFusion

By David Russell, reporter at OptionMonster

NEW YORK -- The bulls piled into CareFusion (CFN) on Monday, looking for the medical-equipment stock to hit record highs.

OptionMonster's tracking systems detected the purchase of about 3,600 October 40 calls, most of which priced for 45 cents. Volume was more than 30 times previous open interest at the strike.

Such calls lock in the price where shares can be purchased, allowing investors to position for gains inexpensively while limited potential losses. But these contracts could expire worthless if shares remain below $40 through mid-October.

CareFusion shares rose 2.04% to $37.94 Monday and are up 33% so far this year. The stock's all-time peak is $39.38, so Monday's traders expect new highs in coming weeks.

Overall option volume was 17 times greater than average in the session, with calls accounting for a bullish 89% of the total.

Russell has no positions in CFN.
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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