By Pete Najarian of OptionMonster
NEW YORK -- PDL BioPharma (PDLI - Get Report) receives royalties from companies such as Roche and Novartis, but Wednesday it was getting some bullish attention in the option market.
Buyers stepped in during CNBC's "Halftime Report," snapping up the May 10 calls for 30 cents. OptionMonster's tracking systems show that more than 3,200 were purchased vs. previous open interest of just 111 contracts, clearly showing that the trades are new positions.
These calls lock in the price where the drug developer's stock can be bought, letting investors cheaply position for a rally. The options can also generate significant leverage if the shares move higher.
PDL's shares rose 1.22% to $9.15 Wednesday, hitting a new 52-week high during the session. The company gets paid on worldwide net sales of products including Avastin, Herceptin, Lucentis, Xolair, Kadcyla, Tysabri, Actemra, and Perjeta.
This is not a name I am familiar with at all, but the May upside paper did cause me to take a look. It has a large short position as well.
Total calls outpaced puts by 3,600 to just 45, a reflection of the session's bullish sentiment. Overall option volume was eight times greater than average.
Najarian owns PDLI calls.

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.