Amarin fell hard last month, but one investor apparently
believes that the long-term trend remains bullish.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 10,000 January 2014 10 calls for $2.08 and the sale
of an equal number of January 2014 17 calls for $0.70. Volume was
more than triple open interest at each strike, indicating that a
new position was initiated.
The trade cost $1.38 and will earn a maximum profit of 407
percent if the drug maker climbs to $17 or higher over the next
year. It's known as
bullish call spread
because it leverages a move between two price points. (See our
AMRN is down 1.77 percent to $8.32 in afternoon trading and has
lost 45 percent of its value in the last six months. Much of that
drop occurred on Dec. 7 after the company borrowed money under a
variable-rate hybrid instrument for as much as 14
The money will be used to help the company market its Vascepa
cholesterol drug. Traders reacted bearishly because it signaled
that AMRN might not be acquired as hoped, and because of the
potential difficulty of marketing a drug without a larger
Since then, however, AMRN has been holding its ground around $8.
That could be leading some investors to think that it's now due
for a bounce. Some bulls already
doubled their money
with short-term weekly options last week.
More than 28,000 contracts have changed hands in the name so far
today, which is already more than 5 times the average daily
amount. Calls outnumber puts by almost 29 to 1.
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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