Big pharma is usually a slow-money sector, but one investor
wants to make a quick buck in drug maker Merck.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 3,738 Weekly 47.50 calls expiring this Friday for
$0.76. An equal number of the Weekly 47.50 puts was sold
simultaneously for $0.77. Volume was more than 30 times open
interest at both strikes, indicating that a new position was
The investor collected a credit of $0.01 from the
and now controls the equivalent of 373,800 shares through the
. The trader can theoretically earn infinite profits above $47.50
but will lose money below that level. (See our
section for more on how to generate leverage with options.)
MRK fell 0.79 percent to $46.70 on Friday. The stock has been
following the broader market higher and is up 14 percent so far
this year, despite lackluster results. It's also been finding
support at its 50-day moving average, which could make some
momentum traders think that it will keep climbing.
Total option volume was twice the daily average in the session,
according to the Heat Seeker.
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