IB Options Brief: athenahealth, Inc. (ATHN) & Manitowoc Company, Inc. (MTW)

Posted April 30th, 2012 by Caitlin Duffy in Unusual Activity

ATHN ñ athenahealth, Inc.
Shares in athenahealth are down for a second consecutive day in the wake of the companyís first-quarter earnings report last week, with the stock today trading 1.4% lower at $72.48 as of 12:20 p.m. ET. ATHN shares have had a monster run to the upside in 2012, gaining 45.0% year-to-date, but one sizable options play on the stock today suggests the shares may take a break from hitting fresh all-time highs.

It looks like one trader sold a 2,000-lot June $75/$85 call spread to pocket a net credit of $2.05 per contract. The strategist walks away with the full amount of premium received on the spread as long as shares in ATHN settle below $75.00 at June expiration. However, any substantial recovery in the price of the underlying between now and expiration day could result in losses above the effective breakeven price of $77.05, with maximum possible losses of $7.95 per contract in the event the stock soars 17.3% to $85.00 in the next eight weeks.

MTW ñ Manitowoc Company, Inc.
Bearish options are in play on industrial manufacturer, Manitowoc Company, as shares in the name slide 5.4% to $13.86, just a few short days ahead of the companyís first-quarter earnings report on Thursday after the close. Put buying the in the front month suggests traders are prepping for the price of the underlying to potentially extend losses in the near term.

The May $13 strike put options are the most active contracts on the name today, trading upwards of 3,100 times against open interest of 715 positions. It looks like the most of the put options were purchased at a premium of $0.50 apiece. Put buyers may be taking outright bearish positions on MTW heading into earnings or hedging long positions in the underlying shares. Profit, or downside protection, kicks in if shares in Manitowoc decline another 9.8% to breach the breakeven point at $12.50 by May expiration.

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