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March 6, 2014  Thu 9:39 AM CT

TEVA: SEE CHART GET CHAIN FIND STRATEGIES
Bullish sentiment reigns in various trades in Teva Pharmaceuticals today as shares hit new highs.

A call spread started the action as a trader sold 3,570 March 46 calls for $5 against open interest of 10,000 and, seconds later, bought 3,570 May 46 calls for the ask price of $6.15. The previous open interest there was just 38, so that was a new position.

This is almost certainly a roll of a long-call position out in time. In-the-money calls are used to reduce exposure to the time premium while having less capital exposure than buying the underlying stock.

Ten minutes later, we see action in the puts. A block of 3,439 June 52.50 puts were bought for the ask price of $4 against open interest of 3,451. Just after that, a block of 3,470 June 55 puts were sold for the bid price of $5.45.

This second trade appears to the roll of a short-put position further up in the money. In this case, the trader is looking for TEVA to be above $55 at expiration. (See our Education section)

TEVA is up 2.13 percent to $50.88 this morning after trading as high as $51.41. These are the drug developer's highest levels since February 2011.
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Market Level Making You Nervous, Huh? Part 3

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