by Houghton and Atkeson 08/18/08
Options investors are buying the Zimmer (ZMH) Sept 75 (ZMHIO), 80 (ZMHIP) and 85 (ZMHIQ) calls today about 18,000 times today. This represents about nine times the usual trading volume for the ZMH options.
We have heard there is unconfirmed speculation that the company may be a takeover candidate. In the past month, the reconstructive orthopedic sector has seen substantial bullish call flow. In fact, it appears that there may be some bullish reconstructive therapy given to this industry in the near term.
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Sam Collins
FAST is now consolidating and recently flashed a buy signal from our internal indicator.
Options Expiration Adds Volatility
The opening looks to be higher but today is options expiration day, and anything could happen.
Chances are high stocks will sell off further, but be alert for a dead-cat bounce after such a dramatic breakdown.
Traders and longer-term investors should sell any new positions at the first opportunity and short ETFs on a temporary recovery in the market.
CAT, the blue-chip of its industry, is the first to attract attention when it's time to dress up a portfolio.
