OptionsHouse

Options Trading News

February 20, 2013  Wed 5:15 AM CT

SRPT: SEE CHART GET CHAIN FIND STRATEGIES
Sarepta Therapeutics has been holding its ground for months, and now the bulls are looking for the next leg higher.

optionMONSTER's tracking systems detected the purchase of about 2,500 March 25 calls, with the largest block pricing for $4. A short while later, a similar number of April 30 calls were bought for $3.20 to $4.70. There was barely any open interest at either strike, indicating that new money was put to work on the long side.

Long calls lock in the price where investors can buy shares, so they can generate significant leverage in the event of a rally. But they're also susceptible to losing most or all of their value if the stock doesn't move. (See our Education section)

SRPT rose 4.98 percent to $27.61 yesterday. The drug developer is up about 2,500 percent since July, driven by strong clinical-trial data of its eteplirsen compound for the treatment of Duchenne muscular dystrophy.

The stock has been paused more recently, allowing its 100-day moving average to catch up with the share price. That could be leading some traders to believe that it's ready to continue higher.

Total option volume in SRPT was 8 times greater than average yesterday, with calls outnumbering puts by a bullish 15-to-1 ratio.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends


Related Stories

SRPT

What's behind put volume in Sarepta

August 23, 2016

The biopharmaceutical company has soared 49 percent in the last three months, but a large trader apparently believes that a big drop may be coming.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Dissecting a big institutional trade

This week's column will study a recent call ratio spread. We're not recommending using this strategy because it has potentially huge risk. But we can learn from this different use of options by a large institutional investor.

View more education articles »