Endo Health draws big call spread
David Russell | [email protected]
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.