Hospira traders aim for further gains

optionMONSTER

Hospira has been ripping, and one bull expects the gains to continue.

optionMONSTER's Heat Seeker tracking program detected the purchase of 6,300 February 35 calls for $1.15 and the sale of 6,390 January 35 calls for $0.20. Volume was below open interest in the January options, indicating that an existing position was closed and rolled to the higher strike.

The investor paid about $0.95 and now has an additional month to profit from upside in the Illinois-based drug maker. Adjusting the position now protected them from losing money in the January contracts with expiration looming this Friday. (See our Education section)

HSP is up 0.96 percent to $35.08 in early afternoon trading. It fell below $29 in late November despite a track record of strong earnings.

Call buyers stepped in at those lows, and more than tripled their money as the stock rebounded in subsequent weeks. The stock has continued rallying since, driven higher more recently after CEO Michael Ball made bullish comments at the JP Morgan Health Care conference on Jan. 7.

Total option volume is 38 times greater than average in HSP so far today. Calls outnumber puts by a bullish 193-to-1 ratio.

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