One investor is looking for major upside in Chelsea
Therapeutics, even with the stock down hard today.
optionMONSTER's trade scanners detected the purchase of some 5,000
March 3 calls for $1.41 and the sale of a matching number of March
7 calls for $0.44. Volume was below open interest at the lower
strike, indicating that an existing short position was closed and
rolled forward in time.
CHTP is down 6.01 percent to $3.13 after the drug developer sold
6.67 million shares for $3 each. Proceeds will be used to finance
development of its Northera drug for the treatment of
lightheadedness, which will be reviewed by a Food and Drug
Administration advisory panel on Jan. 14.
The investor probably owns shares and had sold the March 3s as part
. He or she then bought those contracts back today and rolled to
the higher strike. It cost them $0.97, but they now have the right
to make $4 more on the stock.
Making the adjustment made sense with the stock falling because the
March 3 calls they were short have a
. They're down $0.20 today, compared with a $0.15 drop for the 7s.
Total option volume in the name tops 16,000 contracts so far today,
21 times greater than its daily average for the last month..
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