Bristol-Myers Squibb has been grinding slowly higher, and now
the bulls are looking for a blastoff.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 5,000 January 52.50 calls for $1.79. Equal numbers of
contracts were sold in the January 46 puts for $1.23 and 5,000
January 60 calls for $0.30, resulting in an overall net cost of
The trade is bullish, with the potential to inflate to a value of
$7.50 if the drug maker closes at $60 or higher by early next year.
The investor is also on the hook to buy shares for $46 if they go
under that level--a risk that he or she may be willing to accept
because that's roughly where the stock bounced in June. (See our
section for more on the three-way trade, which
to offset the cost of a
bullish call spread
BMY was up 0.04 percent to $50.55 yesterday. It gapped lower on a
big analyst downgrade in May but jumped with positive drug data in
late June, and the company reported strong quarterly results one
month later. Shares have been pushing against resistance at their
200-day moving average more recently, which could make chart
watchers expect a big move if it breaks.
The next potential catalyst could come as early as Monday, when
management is scheduled to appear at the Morgan Stanley 2014 Global
Health Care Conference.
Total option volume in BMY yesterday was 5 times greater than its
daily average for the last month.
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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