Halozyme Therapeutics spiked higher yesterday after announcing
the appointment of a new CEO, and traders made a quick profit on
Our trading scanners detected the bullish action right after the
market opened with a print of 5,000 January 15 calls purchased for
the ask price of $0.45. The buying
continued throughout the session
, as optionMONSTER co-founder Jon "DRJ" Najarian pointed out on
CNBC's Halftime Report yesterday, and finished with more than
13,800 contracts priced all the way up to $1.35--a gain of exactly
300 percent. Open interest in the name was a mere 279 contracts at
the start of the day, clearly showing that new positions were
lock in the price where traders can buy a stock, allowing them to
cheaply establish an upside position with limited risk. The
contracts can provide major leverage if a rally ensues--as seen in
the tripling of HALO premiums yesterday--but can also expire
worthless if shares remain below the strike price. (See our
HALO surged 16.6 percent yesterday to close at $14.75, just $0.02
off its session high. The drug developer closed the previous
session right at its 50-day moving average.
Total option volume in HALO topped 29,600 contracts yesterday, 19
times its daily average for the last month. Overall calls
outnumbered puts by a bullish 11-to-1 ratio.
(A version of this post appeared on
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