Keryx Rises With Hopes on Cancer Drug

By Jon "DRJ" Najarian, co-founder of OptionMonster

NEW YORK -- The bulls were all over Keryx Biopharmaceuticals ( KERX) and AEterna Zentaris ( AEZS) Monday amid optimism about their Perifosine drug.

Seeking Alpha said Friday that the market hadn't realized the potential for the cancer treatment, and both stocks began the week with a bang. In the case of Keryx, someone apparently liked the news enough to sell 6,500 March 4 puts. Those were essentially insurance contracts on the stock price, so selling them represented a vote of confidence.

Traders also bought calls at the March 5, 4, and 3 strikes looking for upside, according to OptionMonster's real-time tracking systems. Those calls lock in the price they need to pay to purchase the shares.

Keryx closed the session up 33.51% to $4.94. More than 51,000 options traded in the session, compared with a daily average of about 3,000.

AEterna Zentaris also rallied 22% to $2.14 but doesn't trade any options.

Najarian owns KERX call spreads.
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.