By Mike Yamamoto of OptionMonster
NEW YORK -- Mylan (MYL) hit a new all-time high on Friday, and the bulls are looking for even more gains.
OptionMonster's tracking systems detected the purchase of more than 9,000 July 55 calls, mostly going for 88 cents to $1.09. This is clearly fresh buying, as the volume was far above the strike's previous open interest of just 227 contracts.
These calls lock in the price where a stock can be bought through mid-July no matter how far it might climb, letting traders position for gains at a fraction of the cost with potentially significant leverage. The contracts could be sold earlier at a profit if premiums rise with a rally before then, but they will expire worthless if shares remain below $55.
The pharmaceutical name also drew bullish activity in the April 49 calls, with more than 1,700 purchased for $1.52 to $1.59 against open interest of 63 contracts.
Mylan's shares rose 1.93% to $45.97, just off their intraday peak of $46.01, and are up 63% in the last year. The company is scheduled to present at the J.P. Morgan Annual Healthcare Conference on Tuesday.
Overall option volume in Mylan was just shy of 20,500 contracts on Friday, more than 10 times its daily average for the last month. Calls accounted for more than 90% of the total, reflecting the session's bullish sentiment.
Yamamoto has no positions in MYL.