OptionsHouse

Options Trading News

December 11, 2012  Tue 9:47 AM CT

MDVN: SEE CHART GET CHAIN FIND STRATEGIES
Biopharmaceutical company Medivation isn't participating in the broad market rally today, but one large option trade is bullish.

More than 8,800 MDVN options have traded already this morning, compared to a daily average of 1,300 in the last month. Almost all of the action is in a three-way spread.

A trader sold 2,750 December 52.50 calls for $3.30 against open interest of more than 3,600 contracts. At the same time, he or she bought 2,750 January 55 calls for the ask price of $3.70 and sold the same number of the January 65 calls for $0.40. The volume at each of those strikes was more than open interest, and the bid/ask spread is wide at all three strikes.

The trade is a roll out of the December calls and into the January call spread. The transaction was done for even money and allows the trader to capture any further gains in MDVN up to the $65 level. (See our Education section)

MDVN is down 0.56 percent on the day at $55.02. The stock bounced off support at $44 a month ago and has been climbing since, but it hasn't regained the highs from early October when it was above $58.
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

View more education articles »