Nektar Therapeutics has cooled after rebounding sharply this year, but one trader apparently believes that the stock will resume its run in coming months.
optionMONSTER's Heat Seeker system shows that a trader sold 3,000 May 8 calls for $1.55 and
bought the same number of August 10 calls for $1.10. The May options were below previous open interest while the August contracts were above it.
This indicates that the investor is closing the May 8 calls, which are now in the money , and is rolling the position to the higher strike in August. The trader probably made a profit on the initial calls and is using those gains to buy another three months of upside exposure.
The new long calls , which lock in the price where the stock can be bought, are now looking for NKTR to trade above $10 by mid-August but will expire worthless if the stock is below that strike price. The move follows another roll from the May 8 calls on Jan. 16 . (See our Education section)
NKTR slipped 1.72 percent to $8.57 yesterday, continuing to drift lower since hitting resistance around the $9.50 level last week. The clinical-stage biopharmaceutical company plunged from above $10 in mid-October to below $6 less than a month later but then bounced sharply.
Yesterday's call roll made up almost all of the option volume in the name, which was about 6 times its daily average in the last month. Only 26 puts changed hands in the entire session, a further reflection of the day's bullish sentiment.
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