Options Trading News

Human Genome Sciences is up almost 100 percent today, but that's chump change compared with the profit of one option trader.

Yesterday optionMONSTER's tracking systems detected a complex strategy in which a trader bought the January 8 calls while selling the January 5 puts and January 15 calls. It entailed a cost of $0.60.

Today it's worth about $4.80--a gain of more than 700 percent. That profit could still inflate to more than 1,000 percent if developments unfold in the right direction.

HGSI is up 97 percent to $14.16 in afternoon trading, exploding higher after GlaxoSmithKline offered to buy the ailing drug maker for $13 a share. The board rejected the bid as too low and announced that it had hired Goldman Sachs and Credit Suisse to help it consider strategic alternatives.

Before the GSK news, HGSI had lost about three-quarters of its value in the preceding nine months. Yesterday's complex option trade will earn its maximum profit if the stock is at or above $15 on expiration. (See our Education section)