Options Trading News

October 7, 2011  Fri 12:20 PM CT

Shares of Celgene are near multi-year highs, but option traders apparently believe that resistance levels will hold.

CELG trades at 63.11, down 0.4 percent. The biopharmaceutical company's stock hit a 52-week high of $65.86 on Sept. 20, which is resistance going back for at least three years. Shares have been on the rise since plunging to support at $52 in early August.

More than 5,000 November 65 calls were sold today against open interest of 1,259 contracts, according to optionMONSTER's systems. The largest block of 3,127 went for the bid price of $2.15.

We have seen a considerable amount of call selling in institutional size the last two days. It appears that traders are trying to capture high volatility premiums but don't see equities continuing the current rally.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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