Traders are finding a buying opportunity in pharmaceutical company Warner Chilcott, which has lost half its market value in the last seven months and is close to its 52-week low.
optionMONSTER's Heat Seeker tracking system detected the purchase of 3,035 January 13 calls for the ask price of $0.30. The volume was above the open interest of 2,510 at the beginning of the day, indicating new activity.
WCRX is down 2.5 percent to $11.69 in early afternoon trading. The drug developer beat earnings expectations on Nov. 9 but has faced stubborn resistance at the $12 level for the last month. Shares have plummeted 50 percent from their 52-week high of $23.28 of April 30 to their low of $11.21 on Nov. 5.
Today's call buyers are looking for WCRX to gain roughly 14 percent by expiration in less than two months. The options could be sold at a profit earlier if their premiums rise before then, but the calls will expire worthless if the stock doesn't rally.
Total option volume in the name is already 6 times its full-session average. Calls are outpacing puts by 3 to 1.
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The Irish drug maker is up 36 percent so far this month, with most that move occurring when the company disclosed that it was in talks with Actavis for a potential combination.
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