Will Shire rebound to recent highs?
Mike Yamamoto | [email protected]
optionMONSTER's Heat Seeker tracking system detected the purchase of 1,320 April 95 calls for $5.20 yesterday. That volume was nearly 3 times the open interest of 454 contracts in the strike at the beginning of the day, indicating that this is fresh buying.
SHPG rose 0.83 percent to close at $88.63 yesterday. The stock spiked above $95 in early September but gapped below $89 two weeks later, and it has been trading sideways since then.
Yesterday's long calls are betting that SHPG will be above the $95 strike price in six months. The premiums in those options could rise before then in the event of a rally, allowing the trader to sell them early with a profit. If the stock doesn't gain, however, those calls could expire worthless in mid-April 2013. (See our Education section)
Total option volume in the name was 3.5 times its daily average. Only 143 puts traded in the session, a reflection of the day's bullish bias.