These long calls lock in an entry price of $5 on the fast-moving drug developer, which is up 81 percent in the last three months. If Vical continue to rally, the options will leverage the move higher, but they will also expire worthless if the stock fails to appreciate.
VICL fell 1.57 percent to $4.39 yesterday but at one point was down more than 4 percent. The stock ripped higher after the company announced on Oct. 3 that its herpes vaccination produced good results on guinea pigs in a Phase 2 clinical study. Vical has also presented at two big conferences since then.
Overall option volume in the name was 14 times greater than average yesterday, with calls accounting for a bullish 94 percent of the activity.
Second Opinion: Pharma Plays for 2012
—Russell has no positions in VICL
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David Russell is a reporter and writer for OptionMonster.