Market Overview

Carter Worth And Mike Khouw's Celgene Trade


Carter Worth spoke on CNBC's Options Action about the healthcare sector. He compared the year-to-date performance of the sector with the performance of the financial sector and he concluded that the spread between them is on its historical highs. Worth added that it usually makes sense in these situations to bet that the spread is going to reverse.

Mike Khouw thinks that it's better to trade individual stocks in the health care space than Health Care SPDR (ETF) (NYSE: XLV). He suggested that traders should buy the February 120/130 call spread in Celgene Corporation (NASDAQ: CELG) for $2.55.

The trade breaks even at $122.55 or 5.87 percent higher from the closing price on Friday. If Celgene jumps to $130 or higher, the trade is going to reach its maximal profit of $7.45.


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Posted-In: Carter Worth CNBC Mike Khouw Options ActionOptions Markets Media