One investor apparently thinks that Rigel Pharmaceuticals is
ready to bounce after a major drop last year.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 2,010 June 10 calls for $1 and the sale of an equal
number of June 15 calls for $0.15. Volume exceeded the previous
open interest at each strike, indicating that these are new
The trade cost $0.85 and will earn a maximum profit of 488 percent
if the drug developer closes at or above $15 on expiration. (See
section for more on the strategy, which is known as a
bullish call spread
because it leverages a move between two prices.)
RIGL is up 0.52 percent to $6.74 in morning trading and has been
holding its ground since mid-December. That's when a clinical study
showed that the company's fostamatinib drug lagged competition in
the treatment of rheumatoid arthritis.
The stock gapped lower on that announcement but has been holding
long-term support ever since. Today's call spread lets the investor
place a cheap bet on a big rebound, limiting the amount of money
that would be lost if it makes new lows.
Total option volume is 12 times greater than average so far today,
according to the Heat Seeker. Calls outnumber puts a by a bullish
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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