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Buyers take another dose of Vical

Option traders are betting that Vical has more room to run.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 2,600 February 5 calls against open interest of just 7 contracts. They initially priced for $0.25 but then shot as high as $0.80 as buyers clambered for a position.

These long calls lock in an entry price of $5 on the fast-moving drug developer, which is up 81 percent in the last three months. If Vical continue to rally, the options will leverage the move higher, but they will also expire worthless if the stock fails to appreciate. (See our Education section)

VICL fell 1.57 percent to $4.39 yesterday but at one point was down more than 4 percent. The stock ripped higher after the company announced on Oct. 3 that its herpes vaccination produced good results on guinea pigs in a Phase 2 clinical study. Vical has also presented at two big conferences since then.

Overall option volume in the name was 14 times greater than average yesterday, with calls accounting for a bullish 94 percent of the activity.

(A version of this post appeared on InsideOptions Pro yesterday.)

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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