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May 22, 2013  Wed 4:14 AM CT

CHTP: SEE CHART GET CHAIN FIND STRATEGIES
Chelsea Therapeutics does not typically see much option activity, but traders are turning bullish on the name.

The pharmaceutical company averages just 218 contracts per session, but yesterday it saw 1,600 July 2 calls change hands. Three prints of 500 each were purchased for $0.19 in volume far above the strike's previous open interest of just 65 contracts, clearly indicating that this is fresh buying.

These long calls are betting that CHTP will rally above $2.19 by mid-July. The options lock in the price where the stock can be bought no matter how far it might rise, but they could expire worthless if the shares don't move. (See our Education section)

CHTP ended yesterday's session flat at $1.84. The stock reached a 52-week high of $2.17 on March 27 but has been trading in an increasingly tight range since then. The company, which reported first-quarter results on May 1, is seeking approval from the Food and Drug Administration for a neurological drug proposed to treat Parkinson's disease and other disorders.

The July 2 calls made up almost all of the name's total volume of 1,787 contracts yesterday. Only 41 puts changed hands, further reflection of the session's bullish sentiment.
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