After a long rally, one trader apparently thinks that Actavis is
running out of gas.
optionMONSTER's tracking programs detected the purchase of 5,000
March 90 calls for $0.15 and the sale of an equal number of May 90
calls for $1.15. Volume was below open interest in the March
contracts but not in the May options, which means that an existing
short position was closed and rolled forward in time.
The investor probably owns shares in the drug maker, formerly known
as Watson Pharmaceuticals, and has been
selling calls against those holdings
. He or she collected an additional $1 of income from yesterday's
trade while committing to remain in the trade for an additional two
months. (See our
ACT fell 0.84 percent to $85.16 yesterday. The stock is up more
than 40 percent in the last year but has been edging lower since
late December. It peaked around $90 at that time, which could be
leading some chart watchers to think that level has become
More than 10,000 contracts traded in the session, 15 times greater
than average amounts, according to optionMONSTER data.
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