Options Trading News

September 16, 2016  Fri 9:25 AM CT


Depomed is surging on speculation of a possible sale, and one large trade sees more upside potential by the end of the year.

optionMONSTER's market scanner shows that 5,000 December 28 calls were purchased in one print for $1.43 today. This is clearly a new position, as open interest in the strike was only 418 contracts before the trade occurred.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

DEPO is up 10.66 percent to $23.50 in morning trading after news reports that the company may be considering selling itself. The specialty-drug developer is up 7 percent in the last three months and is expected to report earnings after the close on Nov. 2.

Overall option volume is 5 times greater than average so far today. Calls outnumber puts by a bullish 16-to-1 ratio.

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