SNAP Shares Pop and Options Follow

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In a good news-bad news week for

Synaptic Pharmaceutical

(SNAP) - Get Report

, the good apparently won out as the company attracted unusual options volume yesterday afternoon.

Traders on the floor of the

Philadelphia Stock Exchange

, where most of the company's options trading gets done, said call buyers

hit the market

just after 2:30 p.m. EDT and were making a case for a quick jump in the stock price. And Synaptic shares ran up 2 3/16 to close at 15 13/16. Today, the stock was trading at 15 1/2, off 5/16.

On Monday, Synaptic filed the good news and the bad news with the

Securities and Exchange Commission

.

The company said partner

Eli Lilly

(LLY) - Get Report

had stopped developing a smoking-cessation project before it entered human trials.

So goes drug development. More importantly, however, the company pushed a product for depression -- dubbed "son of Prozac" by Rich van den Broek of

Hambrecht & Quist

-- into Phase I safety trials in people, a good sign. "It's a net positive, no question," says the analyst, whose firm has done underwriting for the company.

Nevertheless, why investors would be buying calls expecting a short-term pop baffled van den Broek. The news probably won't generate that kind of stock move. "Why people are going crazy on the options, I don't know," he says.

Yet, crazy they were, at least in one particular issue. When the volume began creeping into the market, the October 15 calls were out of the money, but by the close more than 200 such contracts had traded. The contract was a hot property as its price climbed 15/16 ($93.75) to 2 ($200), an 88% spike. Not bad for an hour's work.

For traders hoping to leg into the stock via the option, as opposed to trading only the option, they'll have to wait for the stock to climb to 17 to make their calls a break-even play.

The Synaptic options aren't big traders. The open interest on the October 15 calls stood at 53 contracts today, and only the October 12 1/2 puts, with 30 contracts outstanding, had any other significant open interest. The average daily volume for Synaptic options was 21 in August and has been about 80 through September.