Cytokinetics draws upside bets

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Cytokinetics has been running, and the bulls are taking notice.

optionMONSTER's Heat Seeker monitoring system shows that 3,400 May 10 calls were bought for $2.10 to $3.20 on Friday. Open interest in the strike was just 761 contracts when the session began, so new positions were clearly initiated.

The call buyers have the right to purchase the drug developer's stock for $10 through May no matter how far it might climb. This way, the investors have limited risk and will avoid missing a major rally. (See our Education section for more on the benefits of using options in your portfolio.)

CYTK rallied 15 percent to $9.58 on Friday. The stock peaked above $14 in July and bottomed out around $6 late last year. The pharmaceutical company is up more than 50 percent in the last month after releasing positive Phase I data for its CK-2127107 compound for treating muscle loss.

Overall option volume was 70 times greater than average in the session, according to the Heat Seeker. Calls accounted for a bullish 95 percent of the total.



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: CYTK

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