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Option Bulls Pouring into Mylan — at Highs

Wednesday, 19 Jan 2011 | 10:23 AM ET

Option trading is often active in Mylan, and the generic drug maker was lighting up OptionMonster tracking systems again as it hit a five-year intraday high.

Investors were buying time, getting into the April calls. Previous bursts of trading on Jan. 6 and Jan. 10 focused on the nearer-term contracts.

Trading in the April 23 calls started with an institutional-sized block of 2,142 bought for $1.34 after the stock opened higher. Shares continued to rally, ending Tuesday's session up 4.56 percent at $23.84 and hitting its highest intraday level since early 2006 at $24.07.

For those calls to turn a profit, the stock needs to gain some 2 percent by the time the options expire in mid-April.

Our systems also detected about 3,000 February 25 calls, first bought for $0.20, but then in size for $0.34 and as much as $0.50. Most of those trades changed hands at or near the ask price, which is also bullish.

More than 20,000 contracts ended up trading in the name, which normally sees only about 3,000 move in a day. Fewer than 1,000 of those contracts were puts.

Disclosures:

Pete Najarian owns MYL calls.

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Options Trading School:

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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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