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Options Trading News

May 9, 2013  Thu 4:14 AM CT

EXEL: SEE CHART GET CHAIN FIND STRATEGIES
Exelixis popped yesterday after beating first-quarter estimates, and traders are looking for more gains in the biotechnology company.

About 1,300 June 5 calls traded in a strong buying pattern yesterday as premiums rose from $0.25 to $0.35, according to optionMONSTER's Heat Seeker tracking system. The volume was well above the strike's open interest of 310 contracts before the session began, indicating that these are new positions.

EXEL rose 7.41 percent to close the session at $4.93, a penny off the session high. Shares had fallen sharply from a high of $5.30 last week but bounced back above several key moving averages yesterday. After Tuesday's close, the cancer-drug developer reported a narrower-than-expected loss and revenues that exceeded analysts' forecasts.

Yesterday's long calls are looking for EXEL to gain roughly 6.5 percent to 8.5 percent by mid-June. These options lock in the price where traders can buy the stock no matter how far it might climb, but they will expire worthless if shares remain below the $5 strike price. (See our Education section)

Total option volume in the name yesterday was more than 2.5 times its daily average for the last month. Only 30 puts changed hands, an indication of the session's bullish sentiment.
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