Call buying flows in Charles River

optionMONSTER

Charles River Laboratories is trying to rebound after pulling back from multi-year highs, and one trader is turning bullish on the name ahead of several key industry conferences.

optionMONSTER's Heat Seeker system shows that 1,250 May 45 calls were bought in about 1 minute on Friday afternoon, almost all of them going for $0.65. The volume was well above the strike's open interest of 705 contracts before the session began, indicating that this is a new position.

CRL slipped 0.34 percent on Friday to close at $40.60. The drug-research service provider began 2013 with a bang, gapping up from below $37 on the first session of the year and running to $43.30 on Jan. 25, its highest level since October 2008. Shares then declined after mixed quarterly results in mid-February but bounced at their 100-day moving average last week.

Friday's long calls , which lock in the purchase price of the stock, are betting that CRL will gain at least 12.5 percent by mid-May. Those options could be sold earlier at a profit if their value rises with any rally before then, but they will expire worthless if shares remain below the $45 strike price. (See our Education section)

The call buying made up almost all of the 1,278 options that traded in the name, which has averaged just 87 contracts of total daily volume for the last month. No puts changed hands in the session, a reflection of the day's bullish sentiment.

Charles River will to present at three conferences in the next two weeks, including the Raymond James Annual Institutional Investors Conference today. The company is then scheduled for Cowen's Annual Health Care Conference tomorrow and Barclays' Global Healthcare Conference on March 13.

More From optionMONSTER

Rates

View Comments (0)