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Options Show Worry in Express Scripts & Medco Merger (ESRX, MHS)

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By Jon C. Ogg Published
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Express Scripts, Inc. (NASDAQ: ESRX) is trading higher despite a flagged trade which stands out.  The concern is that more and more bets are coming in against the chances of an approval of this ongoing MedcoHealth Solutions Inc. (NYSE: MHS) merger.  What is interesting is that Express Scripts shares are higher on not so out of the ordinary trading volume.  It appears as though there is a chicken-bull trade being put on in case the deal is blocked or in case the coming news flow is not very favorable on the prescription benefit management company.  The ongoing scrutiny from the Federal Trade Commission and from the Department of Justice has probably not been any serious means of help.  Here is the volume in the corresponding Put options which expire in FEB-2012 in the various strike prices of $50.00, $47.50, and also in the $45.00:

PUTS  Traded OpInt
45.00 1,036  10,122
47.50 2,616   5,670
50.00 11,996 4,950

Express Scripts shares are trading up 1.7% at $52.03 and MedcoHealth shares are trading up 1.6% at $63.01.

JON C. OGG

Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. a673b.bigscoots-temp.com.

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