OptionsHouse

Options Trading News

December 5, 2012  Wed 9:59 AM CT

ACAD: SEE CHART GET CHAIN FIND STRATEGIES
Acadia Pharmaceuticals has slipped back below a key $5 level, but today's option activity is topped by large call trade.

optionMONSTER's systems show that a trader sold 7,500 December 2.50 calls against open interest of more than 18,000. At the same time, he or she bought 7,500 January 2014 4 calls for the ask price of $1.95 in volume that dwarfs open interest of just 3 contracts, so this is new activity.

If the December calls were sold to open a new position, this is a diagonal call spread. But it seems much more likely that this is a roll, with the trader selling the in-the-money calls that will expire in a few weeks and opening the position out more than a year to take advantage of any further gains.

ACAD is down 4 percent to $4.80 this morning. The stock gapped up last week from just above $2 to a high of $6.54 on positive news about an antipsychotic drug that it is developing. Shares slipped but have still been closing at or above $5 since then.

More than 20,000 ACAD options have already changed hands this morning, more than twice its daily average over the last month.
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Keep it simple

One of the appealing features about options trading is that different options can be combined to create a large variety of risk vs. reward profiles.

View more education articles »