Markets

Bulls rolling with Horizon Pharma

(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)

Horizon Pharma delivered winning trades earlier this year, the bulls came back yesterday.

optionMONSTER's Heat Seeker system detected the purchase of 10,000 August 35 calls for $2.65 and the sale of 6,000 August 31 calls sold for $5. Volume was below open interest at the lower strike, which indicates that a long position was rolled higher.

Long calls lock in the price where investors can buy a stock, ensuring that they won't miss a rally. Their cheap cost helps manage risk and can generate significant leverage on a percentage basis. The August 35s, for instance, kept trading throughout the day and fetched as much as $3.73 by the afternoon. (See our Education section)

HZNP ended the session up 3.88 percent to a new all-time high of $36.69. The drug company is already up 188 percent this year as investors have embraced its tax-saving relocation to Ireland and aggressive growth-by-acquisition strategy.

Subscribers of our premium InsideOptions Pro service had several profitable trades along the way. For example, August 32 calls cited l late last month had nearly doubled in value by yesterday.

Total option volume was 14 times greater than average, with calls outnumbering puts by 17 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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