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Options Action: Drug Firm Sees Heavy Call Activity

Generic drug company Forest Labs is seeing heavy call activity amid buyout rumors.

Forest Labs traded an average of 500 calls per day in the month of March but today saw 15,000 calls change hands in the first 30 minutes alone, according to our proprietary Heat Seeker system. I'd call that institutional interest, wouldn't you?

Rumors are circulating among hedge funds that a deal to buy the company is being considered in the $30-plus neighborhood.

Shares of Forest Labs are up near $23 halfway through the session after having risen steadily since trading below $19 three weeks ago.

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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.

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