Bulls make fast money in Halozyme

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Halozyme Therapeutics spiked higher yesterday after announcing the appointment of a new CEO, and traders made a quick profit on the move.

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 initiated.

Long calls 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 Education section)

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 InsideOptions Pro yesterday.)



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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This article appears in: Investing , Options

Referenced Stocks: HALO

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