Options Trading News

February 28, 2013  Thu 1:47 AM CT

Endo Health Solutions reports earnings after the bell today, and the bulls are stepping in.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 10,000 April 30 calls for $1.78 and the sale of a matching number of April 35 calls for $0.33. Volume exceeded the previous open interest in each strike, indicating that these are new positions.

The trade resulted in a cost of $1.45 and will earn a maximum profit of 245 percent if the drug maker closes at or above $35 on expiration. It's known as a bullish call spread because it leverages a move between two prices, in this case $30 and $35. (See our Education section)

ENDP rose 3.29 percent to $30.80 yesterday. It is down 19 percent in the last year but has been working its way higher since early January.

Total option volume in the name was 6 times its daily average in the session, according to the Heat Seeker. Calls outnumbered puts by more than 23 to 1.
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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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