Option Bulls Take Another Shot on Idenix
didn’t perform after a bullish trade last month, but investors are trying again.
Traders bought the June 12.50 calls on April 30, and yesterday 11,000 July 12.50 calls were purchased in large blocks for $1.20, according to OptionMonster’s real-time tracking systems. They also sold the July 17.50 calls for $0.30 and the July 7.50 putsfor $0.60 to help finance the trade.
Owning callslocks in the price investors must pay to buy shares, while selling puts lets them earn income from a bet that it won’t go down. That makes them doubly long the name because they’ll lose money on both if Idenix’s stock price falls, but if it rallies, they’ll also win on both.
The biopharmaceutical company is engaged in the discovery and development of drugs for the treatment of human viral diseases, primarily hepatitis C. Last week an analyst from William Blair cited drug-trial data and other potential catalysts for movement in the stock.
Idenix shares ended higher by 8.27 percent to $10.08. More than 41,000 options traded at all strikes in the name, compared with about 1,500 in a normal session.
—By Pete Najarian, “Fast Money” Contributor
Additional News: Idenix Shares Rise on Analyst Upgrade
Additional Views: Pharma Stocks a ‘Buy’: UBS
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