Health Management Associates (HMA) August Call Options

Shares in Health Management Associates (HMA) are down today, although activity in August contract call options suggests one strategist is positioning for a rally in HMA’s future.

The options player appears to have purchased a debit call spread, buying 1,300 calls at the August $11 strike for a premium of $0.75 each, and selling the same number of calls at the higher August $13 strike at a premium of $0.20 a-pop. The net cost of putting on the spread amounts to $0.55 per contract.

Thus, the bullish trader is poised to profit in the event the health care provider’s shares soar 15.4% over the existing price of $10.08 to surpass the effective breakeven point on the spread at $11.55 by August expiration day. The investor could walk away with maximum potential profits of $1.45 per contract if shares in Health Management Associates jump 29.9% to trade above $13.00 ahead of expiration.

Health Management was trading at $10.08, falling $0.07, or 0.69 percent, as of 2:32PM EST.