Nektar Therapeutics has been rebounding from a big selloff, and
one investor expects the move to continue.
optionMONSTER's Heat Seeker tracking program detected the purchase
of 5,000 May 8 calls for $0.55. An equal number of February 7 calls
were sold at the same time for $0.10, but volume was below open
This activity suggests that the investor rolled a previously
existing position in the February calls to May. The move provides
an additional four months to benefit from upside in the stock while
raising the level at which the trader has the right to buy shares.
The transaction cost a net $0.45.
NKTR is up 2.78 percent to $7.02 in afternoon trading, so those
in the money
. If the stock were to drop between now and expiration tomorrow,
those February calls would probably become worthless, and the
trader will have lost the $0.10.
The drug developer, whose product pipeline includes potential
treatments for cancer, pain, and infections, peaked around $16 in
late 2010 and then fell all the way to $4.07 last November before
rebounding. Sentiment has been improving among drug developers with
promising compounds as large pharmaceutical companies seek new
avenues of growth.
Overall option volume in NKTR is 8 times greater than average so
far today, with not a single put trading in the session.
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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