Bull targets new highs in DaVita

A call spread is looking for DaVita HealthCare to rally in coming months.

optionMONSTER’s Heat Seeker system detected the purchase of 2,500 July 65 calls for the ask price of $4.40 and the sale of 5,000 July 70 calls for $2.20 today. This is clearly new positioning, as volume is above the previous open interest in each strike.

This ratio spread is done for even money, so there is a margin requirement for the additional short calls, but no debit. That means there is no risk in the trade below $65, while the maximum gain comes with the stock up at $70. Above that the trader has the risk of being short shares.

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