This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bulls Want a Lift From Allergan

By David Russell, reporter at OptionMonster

NEW YORK -- Option traders are finding a new favorite in Botox maker Allergan (AGN)

OptionMonster's tracking systems detected the purchase of 2,530 April 95 calls for $4.62 and $4.673. Volume was more than 34 times previous open interest at the strike.

Calls lock in the price investors must pay to buy shares, so they can result in some big profits in the event of a rally. That leverage has already been at work in the name because last week investors bought the October 92.50 calls for 90 cents and 95 cents. At the time, AGN was trading for $92.80.

The stock then inched higher and closed Monday up 1.39% to $93.54. That was a gain of less than 1% from last week's levels. Those October calls, however, inflated by more than 40% to $1.30 from the same move.

Allergan has been trending higher for years but typically sees fewer than 1,000 options trade per session. The recent activity suggests that it's now being discovered by a new group of investors hoping to leverage its bullish momentum. The company's next earnings report is scheduled for Oct. 30.

Calls outnumbered puts by more than 8 to 1 Monday.

Russell has no positions in AGN.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $131.44 -0.91%
FB $81.33 -0.71%
GOOG $553.68 -0.30%
TSLA $233.71 0.93%
YHOO $44.35 -0.02%

Markets

DOW 18,070.79 +32.82 0.18%
S&P 500 2,105.45 -3.47 -0.16%
NASDAQ 5,045.7280 -14.5180 -0.29%

Partners Compare Online Brokers

Free Reports