Amgen rally gets cool reception

Chris McKhann (chris.mckhann@optionmonster.com)
August 11, 2014

Amgen gapped higher last month, but traders aren't sure it will keep rallying.

A block of 2,955 of the September 135 calls was sold for the bid price of $0.98, according to optionMONSTER's tracking systems. Open interest stood at just 756 contracts when the session began, so this was a new position. There was also buying at the August 127 calls for $1.66 against open interest, so they may have rolled a short position out to September.

Selling calls obligates traders to deliver shares at a certain price in the future. It was probably done against a long position in the biotech company as a covered call . (See our Education section.) But it could have been done naked, which would have a bearish bias and significant upside risk.

AMGN rose 0.09 percent to $127.06 in afternoon trading, and is up 6 percent in the last month. It put in a high of $130.01 two weeks ago, having rising from $110 in mid-May.

Total option volume is almost 3 times the daily average so far today.


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