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Call Action Builds on King Pharmaceuticals

King Pharmaceuticals was up in Wednesday after-hours trading following heavy options activity.

The options action began yesterday morning at the $10 strikes in May, July, and October, where calls were jumping on optionMONSTER's proprietary Heat Seeker tracking system. The May 10 calls were particularly notable, ending the day with 11,800 contracts trading against open interest of 1,507.

KG ended the regular session up 3.45 percent and popped another 4.82 percent after the close to $8.48. The stock began to rise a week ago after Goldman Sachs placed King on the firm's vaunted Conviction Buy List, sending the shares over their 50-day moving average and sustaining higher levels since then.

But now what? King acquired pain treatment drug Embeda when it bought rival Alpharma last December, and could be a catalyst for the stock depending on the timetable for the FDA, which has reportedly been reluctant to approve certain painkillers out of concern over abuse.

More Options Tips from Pete Najarian

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.

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