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October 9, 2012  Tue 1:16 AM CT

BMRN: SEE CHART GET CHAIN FIND STRATEGIES
BioMarin Pharmaceutical continued to rise yesterday, but one trader apparently believes that any further upside will be limited.

BMRN rose fractionally to close at $41.73, adding to gains from Friday and the previous month. It was the stock's highest close since July 16, two days after shares hit an all-time intraday high of $44.18.

Total option volume in the name topped 16,000 contracts, more than 5 times its daily average. Trading was most active in the November 47 calls, where 8,340 contracts were sold for the bid price of $1.75. Open interest in the strike was just 109 at the beginning of the day, so this is a new position.

The calls were not traded against any stock that we saw yesterday, so they could have been sold naked with an initial bearish bias. They could also have been traded against long stock as a covered call position.

The latter would be bullish up to the strike price, as that is where the maximum gain would come. But this trade would give up any gains beyond that point. (See our Education section)
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