Huge long-term wager on Achillion
Chris McKhann | [email protected]
optionMONSTER systems show that 53,781 ACHN options changed hands in the session, compared to a daily average of just 3,445. Almost all of that action is in a January 2015 call spread.
A trader bought 25,000 of the 7.50 calls for $2.64 and sold the same number of the 20 calls for $0.39. The relative open interests were 49 and 60, so this is a new call spread. (See our Education section)
The postition cost the trader $2.25, which is the most that can be lost if ACHN is anywhere below $7.50 at expiration in 18 months. The maximum profit would be realized if shares are above $20.
ACHN was up 1.15 percent to close at $7.03 yesterday. The drug developer has been working its way higher since gapping down on July 2. Shares hit a high of exactly $20 in early 2007.