Acadia Pharmaceuticals has been explosive, and one investor is
using options to smooth the ride.
Our Heat Seeker monitoring program detected the purchase of 30,000
January 2015 12 calls for $4.04 and the sale of an equal number of
January 2015 15 calls for $2.64. Volume was below open interest in
the 12s, so there are two possible explanations of the activity.
One is that he or she owns shares and had previously sold the 12s
as part of a
strategy. He or she may have then closed that position and rolled
it to the higher strike, in the process raising their eventual sale
price by $3.
Alternatively, both halves of the trade may have been opened, in
which case it was a
bullish call sprea
d with a maximum potential profit of 114 percent on a move to $15.
Either way, they paid $1.40 and see shares pushing above $12 and
toward $15 over the long-term. (See our
ACAD is down 1.95 percent to $12.08 in midday trading. The
pharmaceutical company is up more than 700 percent in the last year
amid strong results for its Pimavanserin Parkinson's drug.
Total option volume is 7 times greater than average in the stock so
far today, according to the Heat Seeker. Calls outnumber puts by
more than 300 to 1.
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.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.