Novartis buyers issue good prognosis
Mike Yamamoto | [email protected]
optionMONSTER's Heat Seeker tracking system detected the purchase of 1,000 December 62.50 calls at the same second yesterday for $0.50. Open interest at the start of the session was 413 contracts, so this is a new position.
NVS rose 1.09 percent to close at $61.95, a day after breaking above its 50-day moving average. The pharmaceuticals company fell to a support level around $59 about two weeks ago but began a sharp reversal on Nov. 20 when the Food and Drug Administration approved the company's Flucelvax flu vaccine.
The company will present at two industry events next month, the Berenberg European Conference in London on Dec. 6 and the Nomura European Conference in Tokyo on Dec. 11. Novartis is also scheduled to report results for the fourth quarter and all of 2012 on Jan. 23.
Yesterday's call buyer has locked in a purchase price for the stock and is looking for NVS to rise roughly 18 percent by expiration on Dec. 21. If the shares fail to rally by then, however, those contracts will expire worthless. (See our Education section)
The trade pushed total option volume in the name to 8.5 times its daily average. Calls outnumbered puts by more than 3 to 1, reflecting the session's bullish sentiment.