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Abbott Labs Draws Late Buyers

Thursday, 6 Sep 2012 | 6:08 AM ET
Abbott Laboratories
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Abbott Laboratories

Option action lit up yesterday in Abbott Laboratories, which has been a solid performer for the last year.

OptionMonster’s tracking systems detected activity in the November 67.50 calls in the second half of the session, with large blocks bought for $0.74, $0.76, and $0.80. More than 16,000 of those options changed hands, well exceeding previous positioning of 7,641 contracts, indicating that this is fresh buying.

Those calls (learn more) lock in the price investors must pay to buy the stock, so they can generate significant leverage in the event of a rally. But they’ll expire worthless if the shares don’t move.

Abbott Labs shares rose 0.44 percent to close at $65.75. It has a $103 billion market capitalization (learn more) and is valued at 13 times forward earnings. The pharmaceutical company has 20 drug candidates in Phase 2 or Phase 3 clinical trials to drive growth.

Almost 25,000 calls traded versus fewer than 8,000 puts yesterday, a reflection of the session’s bullish bias. Total option volume was more than six times greater than average, according to our data systems.

—By CNBC Contributor Pete Najarian

Additional News: Cramer’s Top Dividend Stocks of 2012

Additional Views: A Bearish Bet Against Abbott Labs

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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. Najarian has no positions in ABT.

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