Bullish Three-Way Trade on Brookdale (BKD)

Shares of Brookdale Senior Living (NYSE: BKD) are lower on the session by 3.60%, currently trading at $14.20. The stock has been moving largely lower over the past four months, off from a recent high near $22.00.

One options trader just executed a bullish three-way spread on the name this morning. The January 2011 $15/20 call spread was purchased 3,000 times and the January 2011 $12.50 put was sold 3,000 times. Net debit on the transaction was only $0.30. Max gain on the transaction is $4.70 or 1,566%.

Note that the trader will be long stock at an adjusted cost basis of $12.80 should shares continue lower.

Brookdale Senior Living Inc. is an operator of senior living communities in the United States based on total capacity, with 565 communities in 35 states and the ability to serve approximately 53,600 residents. As of December 31, 2009, the company operated in four business segments: retirement centers, assisted living, continuing care retirement communities and management services.

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