This Day On The Street
Continue to site
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 Bet Infinity Pharma Will Rebound

By David Russell of OptionMonster
NEW YORK -- Infinity Pharmaceuticals (INFI) has tumbled since the spring, but Tuesday the bulls were back in the name.
OptionMonster's trade scanners detected heavy buying in the December 15 calls, with large chunks pricing for $1.90 about halfway through the morning session. Buyers also targeted the November 15 calls for $1.05 around the same time.
These calls lock in the price where shares can be purchased, providing an inexpensive way for investors to benefit from a rally without buying the stock directly. The options also have the potential to generate significant leverage, but they will expire worthless if shares remain below $15.
Infinity's stock was up barely 2% when the trades hit, but it then started climbing and ended the session at $14.64 for a gain of 5.02%. The calls performed even better: The December contracts rose 37 % to $2.60, and the November options jumped almost 50% to $1.55.
The stock peaked above $50 in early April but closed below $14 on Monday. That's the same level where shares hit resistance in April and May of 2012, which could make some chart watchers think that the stock is finally attractive again.
More than 4,200 November 15s traded Tuesday, while the December 15s saw volume of more than 3,300. In another bullish trade, investors sold the December 13 puts and bought the December 16 calls.
Total option volume in the name topped 13,700 contracts Tuesday, roughly seven times its daily average for the last month.
Russell has no positions in INFI.

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!
AAPL $135.47 2.10%
FB $81.91 0.00%
GOOG $555.37 0.00%
TSLA $233.20 0.71%
YHOO $44.35 -0.02%


DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports