Nektar Therapeutics is holding a key level, and the bulls are
sticking with the name.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of some 5,000 November 11 calls for $1.10 and the sale of about
3,000 August 10 calls for $0.75. Volume was below open interest in
the August contracts, which suggests that an existing position was
closed and rolled to the higher strike.
locks in the price where shares can be bought in the San
Francisco-based drug developer. Rolling positions to long-dated
contracts keeps the investor exposed to gains in a major
rally--triggered perhaps by an acquisition or positive test
results--at a fraction of the stock price. (See our
section for more on how to manage risk with options.)
Yesterday's transaction cost about $325,000 and extends the length
of the position by three months. It also increases leverage because
the number of contracts was almost doubled.
NKTR rose 5.14 percent to $9.81 yesterday and has been moving
sideways for years. It's now in the middle of the range but has
been finding support at its 200-day moving average in the last
month. That could make some chart watchers think that it will push
Total option volume was more than 100 times greater than average in
the stock, according to the Heat Seeker. Not a single put traded
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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