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Why call sellers are targeting Nektar
One investor apparently thinks that the easy money has already
been made in Nektar Therapeutics.
optionMONSTER's monitoring systems detected the sale of more than 5,000 May 7 calls for $0.40. Volume was 39 times open interest in the strike.
By writing calls, the investor is agreeing to sell shares of the drug developer for $7 if they push above that level on expiration. Including the credit earned, the sale price would be $7.40.
He or she probably owns the stock and is using that income as a hedge , taking some profits from NKTR's recent run higher. (See our Education section)
NKTR rose 6.94 percent to $6.16 yesterday and is up 15 percent in the last month. Management is scheduled to present at the JP Morgan Healthcare Conference at 11:30 a.m. ET today.
Chart watchers may also think that upside is limited at about $7 because that was an area where the stock bounced and consolidated in June and July before continuing lower.
The call selling pushed total option volume in NKTR to 5 times greater than average in yesterday's session.