Options Trading News

September 19, 2016  Mon 8:22 AM CT


Traders are looking for Pacific Biosciences to rally in coming weeks.

optionMONSTER's monitoring program shows that 3,100 October 10 calls were purchased for $0.30 to $0.55 on Friday. This represents fresh buying, as open interest in the strike was only 326 contracts before the trades occurred.

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)

PACB fell 0.36 percent to $8.42 on Friday and is down 8 percent in the last three months. The genetic-analysis company reported bullish results on Aug. 4 and is expected to announce its next quarterly numbers after the close on Oct. 20.

Overall option volume was 9 times greater than average in the name on Friday. Calls outnumbered puts by a bullish 5-to-1 ratio.

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