Markets

Trader sticks with Jazz Pharma

Jazz Pharmaceuticals has broken out, and one big investor is giving it room to run.

optionMONSTER's tracking systems detected the purchase of 1,000 March 15 calls for $1.92 against existing open interest. The same number of June 18 calls was sold at the same time for $0.96, indicating a short position was rolled to the higher strike.

JAZZ

The investor probably owns JAZZ stock. Yesterday's option trade gave him or her the right to collect an additional $3 of upside on the shares in return for agreeing to hold the position for an additional three months. It also cost them $0.96.

They may be targeting the $18 level because that's about the same price where JAZZ traded when it became a public company in mid-2007.

The stock climbed 4.83 percent to $14.97 yesterday and is up 41 percent since the beginning of the month following a strong third-quarter earnings report. Management also raised guidance amid strong sales of the narcolepsy drug Xyrem.

JAZZ saw a bullish option trade in early October ahead of an expected regulatory ruling on a different product to treat a joint disorder known as fibromyalgia. That trade probably made a small profit.

Some 4,034 contracts traded in JAZZ yesterday, 11 times greater than average. Calls outnumbered puts by almost 3 to 1.

(Chart courtesy of tradeMONSTER)

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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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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