One investor wants to give Medicines Company more time to rally.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 2,000 January 20 calls for $1.30 and the sale of an equal number
of December 20 calls for $0.45. Volume was below open interest in
December but not January, which suggests that an existing long
position was rolled forward by one month.
The trade cost $0.85 and will give the investor more time to profit
from upside in the drug maker. It also protects them from the
that will erode the value of the December contracts as expiration
approaches. (See our
Another bullish trade occurred less than 15 minutes later when
1,500 January 20 calls were bought for $1.20 and an equal number of
January 17 puts were sold for $0.60. That trade cost $0.60, and is
similar to owning shares in MDCO, which is up more than 30 percent
in the last three months.
Most of those gains followed an Oct. 3 legal settlement with Teva
Pharmaceutical regarding the production of a generic version of
MDCO's Angiomax. Its last earnings report on Oct. 26 was mixed,
with revenue better than expected but profit missing. (See
The stock closed at $18.77 yesterday, down 0.71 percent in the
session. The two bullish trades pushed overall option volume in the
name to more than 80 times greater than average, according to the
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.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.