Options Boil on Biotech M&A Talk

The iShares Nasdaq Biotechnology exchange-traded fund is drawing strong options activity Thursday, as news ranging from mergers to government regulation continues to rock the sector.

More than 4,000 calls were bought for $0.35 at the April 70 strike in the first 90 minutes of trading this morning, four times the open interest, according to OptionMonster's tracking systems. The buying has extended to the June 70 calls as well.

Shares of the IBB ETF are up more than 4 percent in midday trading to $62.90, near the highs of the day but still some 30 percent below their 52-week peak. The index has been on a roller-coaster ride for months, rising with M&A activity and falling with the threat of increased regulatory controls of the industry along with the pharmaceuticals sector.

Just today, Gilead Sciences announced its intention to acquire CV Therapeutics for $1.4 billion, a deal involving two companies in the IBB. Gilead is the ETF's second-largest holding, with an index weighting of 9.7 percent.

More Biotech in the News:



Biogen Idec


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