How one bull is sticking with Illumina
Mike Yamamoto | [email protected]
optionMONSTER's Heat Seeker system shows that a trader sold 2,000 May 75 puts for $0.05 and bought the same number of June 75 puts for $1.45. Volume was below open interest in the May strike but above it in the June contracts, indicating that an investor is rolling a long-call position forward to get another month for the trade to work.
If the trader had not made the adjustment, which cost a net $1.40, the May contracts would have likely expired worthless at the end of today's session as ILMN remains well below the $75 strike price. The June calls, which lock in the price where the stock can be purchased no matter how far it might rise, are now looking for shares to rise above $76.45 in the next five weeks. (See our Education section)
ILMN is up 2.3 percent to $71.25 today after spiking to $77.11 on May 10, its highest intraday price since July 2011. The manufacturer of genetic-testing systems gapped up from the $55 level on April 23 after issuing strong first-quarter results and has been climbing steadily ever since. The company is scheduled to present at the UBS Global Healthcare Conference on Monday.
Total option volume in the name has surpassed 8,400 contracts so far this morning, already 5.5 times its daily average for the last month. Calls outnumber puts by 4.5 to 1.