Options Trading News

August 30, 2013  Fri 3:39 AM CT


Traders are sticking with Nektar Therapeutics as the drug developer consolidates at multiyear highs.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 7,500 October 12 calls for $1.80. A matching number of September 12 calls was sold at the same time for $1.20 against previous open interest.

We cited the buying in the September contracts earlier this month for $1.25 to $1.35, and yesterday's transaction allowed them to extend that bet position by one month at a cost of $0.60. See our Education Section for more on how to manage trades more effectively with options.

NKTR rose 3.05 percent to $12.16 yesterday, and has roughly doubled since late November. The company has a wide array of potential medicines under development, including at least five in late-stage trials. It's spent the last two months consolidating at levels last seen in early 2011.

Total option volume was 19 times greater than average in Wednesday's session, with calls outnumbering puts by a bullish 33-to-1 ratio.

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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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