GERN, WAG Options – Unusual Trading Activity – November 3, 2014
This week we’re taking a look at unusual options trading activity in Geron (GERN) and Walgreen (WAG).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
Geron (GERN)
Biotechs typically come with plenty of options action, and GERN is no exception.
GERN is currently trading for $2.80, up 25% today. The price is 113% above the 52-week low of $1.32 and is 62% below the 52-week high of $7.36.
Today, someone sold 10,000 December 2 puts in blocks for $0.10 and $0.15. Open interest shows these to be opening trades.
Because biotechs tend to move sharply on regulatory news and clinical trial results, traders will often be very active in the options. With GERN, the stock soared on regulatory news. As such, a trader is attempting to make some easy money selling OTM puts while they still have value.
Walgreen (WAG)
Options traders believe WAG could fill the gap down it made in August.
WAG is trading for $65.26. The shares are 14% below the 52-week high of $75.97 and 21% above the 52-week low of $54.04.
Today, about 4,000 Weekly calls were purchased expiring on December 5th. The calls traded for roughly $1.50 and look like opening action.
The calls will become profitable if the stock is trading above $66.50 by the end of December’s first week. After the big drop in August, WAG has made a couple attempts to break through the 200-day moving average around $66. Today’s trade suggests it may finally be a possibility.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
