Market News

January 4, 2017  Wed 7:49 AM CT

Traders are looking for Exelixis to resume its uptrend of recent months.

Our monitoring program shows that about 5,100 January 17 calls were purchased for $0.30 to $0.40 yesterday. This represents fresh buying, as volume was well above the strike's open interest of 1,646 contracts.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

EXEL fell 1.21 percent to $14.73 yesterday. The cancer-drug developer has pulled back 12 percent in the last four weeks but is still up 17 percent in the last three months. Its last quarterly results on Nov. 3 was bullish, and its next earnings report is expected after the close on Feb. 28.

Overall option volume in the name was 4 times greater than average yesterday. Calls outnumbered puts by a bullish 7-to-1 ratio.

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