Perrigo has gotten knocked down a peg, but now the bulls are back.
optionMONSTER's Heat Seeker tracking system detected the purchase of 1,500 August 85 calls for $2.58 and the sale of an equal number of August 95 calls for $0.23. Volume was more than triple open interest in both strikes.
This bullish call spread cost $2.35 and will earn a maximum profit of 326 percent if the generic-drug maker closes at or above $95 on expiration. That's slightly above the stock's all-time high established late last month.
PRGO rose 2.54 percent to $87.98 yesterday and is up 53 percent in the last year. It's been riding a wave of strong demand for its products and has been increasing its profit margins. The next earnings report is scheduled for before the bell on Aug. 16.
Downside in the broader market has driven PRGO lower, and at one point yesterday the stock traded below its 100-day moving average. But it rallied back and ended near the session's highs. The bullish call spread appeared shortly after they bottomed.
Overall option volume in the name was more than 10 times greater than average, with calls accounting for 91 percent of the activity, according to the Heat Seeker.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
