Call toll-free 800.328.1267
[showmodule id=”58959″]
Biotechnology’s quietly coming to life, and options traders are flocking to one of the biggest names in the space.
Want to learn more about options? Sign up for our “Options Stars 2018” symposium in Chicago this month.
Call volume is spiking in Gilead Sciences (GILD) as the developer of antiviral drugs pushes the top of its recent range. Here’s a breakdown of the main activity:
It’s not clear which contract was bought and which was sold. But either way, it looks like the investor was adjusting a bullish position.
On the one hand, it’s possible he or she previously owned the October calls and exited them to roll out one month into the future. In that case, they paid an incremental $1.05 in order to gain more time with exposure to a rally — including the release of third-quarter earnings.
On the other hand, the trader might own GILD equity and be using the options as part of a covered call strategy. If that’s the case, they would have collected a net $1.05 buying back the Octobers and selling the Novembers.
Regardless of which transaction was at play, the investor seems to want exposure to roughly 1 million GILD shares. See our Knowledge Center for more on how options can help you manage risk and earn income.
Gilead Sciences (GILD) chart with range and moving averages.
GILD rose 0.80 percent to $77.83 in early-afternoon trading, and has been trapped in a narrow range recently. It’s climbed in the last three weeks on optimism toward filgotinib, a partner’s arthritis drug.
Total option volume in GILD is more than twice the daily average so far in the session, with calls outnumbering puts by a bullish 8-to-1 ratio.
By the way, did you see the bullish put selling in General Electric (GE) on Friday? That trader is making money today!
Disclosure: This post is for educational purposes only and shouldn’t be considered a trade recommendation. Trading options may not be suitable for all investors.
Options are an important tool for many retail investors. They can either replace trading shares, or make it easier to position oneself in stocks. Let’s consider the first things options traders need to know. An Option’s Price Is Usually Called ‘Premium’ There are some...
Options are complex instruments that can swing sharply in value. Traders may find the moves confusing, so this article will help explain key "Greeks" -- some of the most important factors impacting the price of options. Greeks are Greek letters used in complicated...
Covered calls are one of the most common strategies for options traders. While many investors have heard of them, they may not realize that covered calls are highly versatile. This article will cover how the method can be bullish, neutral and even bearish. First,...