InterMune has been fighting its way higher after a massive
selloff, and one trader is looking for a steady rally into the New
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 8,350 January 10 calls for $4.50 and the sale of an equal number
of January 22.50 calls for $1.30. The trade cost a net $3.20 to
implement and pushed total options volume in the drug developer to
7 times greater than average.
ITMN is down 0.09 percent to $12.10 in afternoon trading. The
shares plunged from over $40 to about $10 on May 5 after the Food
and Drug Administration refused to approve its pirfenidone lung
drug and ordered new trials. Since then the company cut its
earnings guidance and slashed its workforce by 40 percent.
Today's option trade, a bullish call spread, reflects an
expectation the stock will attempt to fill some of the huge bearish
gap from the spring. It will earn a maximum profit of 290 percent
if ITMN climbs to $22.50 by expiration.
ITMN was scheduled to appear at an investor conferences hosted by
Morgan Stanley and Robert W. Baird on Monday and Tuesday. It will
also participate in the 5th Annual JMP Securities Healthcare
Conference at 3 p.m. ET on Sept. 28.
Calls outnumber puts by 37 to 1 in the stock so far today,
reflecting the bullish sentiment.
(Chart courtesy of tradeMONSTER)
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