Onyx Pharmaceuticals has been climbing and the bulls are staying
in the trade.
Two days ago
, our Heat Seeker program detected unusual activity as an investor
boosted by 50 percent the size of a short-term upside trade. Today
a trader is going further out in time, but the sentiment remains
A block of 2,500 February 95 calls was purchased for $5.70 and an
equal number of February 85 calls was sold for $9.55. Volume was
below open interest in the 85s, which indicates that an existing
long position was closed and rolled to the higher strike.
The investor collected a credit of $3.85 and will make more money
if the drug developer continues to rally. It's already up more than
80 percent since June after a Food and Drug Administration panel
voted to recommend approval of the company's Kyprolis blood-cancer
ONXX is down 1.9 percent to $84.19 this morning after hitting an
all-time high above $86 yesterday. If today's option trader expects
a pullback, it makes sense to roll the calls because the February
85s have a
than the 95s (0.55 versus 0.38). That would make them more
sensitive to losing value from a near-term decline in the share
price. (See our
Overall option volume is triple the daily average in ONXX so far
today, with calls outnumbering puts by more than 500 to 1.
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