Zoetis was spun off from Pfizer early this year, and one big
investor thinks the animal spirits are ready to take over.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 3,000 July 33 calls for $1.90 and the sale of 3,000
July 27 puts for $0.95. A block of 3,000 January 32 calls were sold
for $0.70, but volume was below open interest in those.
The investor apparently
the January 32 calls in hopes of a rally and rolled the position
into the July combination spread. Making the adjustment cost a net
$0.25 and provides an additional six months of upside exposure. But
the trader also carries the risk of having to buy shares if they
fall under $27, which is more than $1.50 below the stock's 52-week
low. (See our
section for more on the benefits and perils of
ZTS is up 0.62 percent to $31.64 in afternoon trading. The maker of
veterinary medicines went public for $26 in February but leapt
higher and has traded between $29 and $34 since then. Its last
three earnings reports have beaten estimates, and the shares are
trying to consolidate above their 100-day moving average. That
could make some chart watchers think that they're ready to run
The Heat Seeker shows total option volume at 18 times greater than
average so far today, with the bullish three-way trade accounting
for almost all the activity.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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