Trade alert on Questcor (QCOR) call selling


Questcor Pharmaceuticals Inc. (NASDAQ: QCOR ) saw a big block of near-term calls cross the tape thanks to an investor who could be expressing moderate bearishness on the company. QCOR shares edged up during morning trading without any notable news, but the upside could be short lived according to one investor.

At 11:16 a.m. EST, a block of 4,756 QCOR September 12.5 calls changed hands for 45 cents per contract. These options crossed for a premium that was closer to the bid price when the volume hit the tape. Current open interest in this line is 36 contracts, indicating the investor opened this lot to open short call positions.

The maximum profit on this trade is equal to the premium collected, or a total of $214,020 in this particular trade. The investor retains the entire credit if the stock is trading lower than the strike price at expiration. Once the stock climbs higher than the strike price, this trade starts to lose money. The investor gives back some of the credit if the stock is trading between the strike price and breakeven price. If QCOR is trading higher than $12.95 at expiration, the investor will lose money and continue to do so in direct relation to the stock's ascent.

QCOR announced in-line earnings figures of 14 cents per share on July 28. The stock gained 15 cents, or more than 1%, to $11.40 during morning trading. QCOR is trading up near its 52-week high of $11.62, but it looks like at least one investor is willing to cap profits to bet on limited upside during the near term.

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.

This article appears in: Investing , Options

Referenced Stocks: QCOR

Karla Yeh

Karla Yeh

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