Illumina draws bulls near year's highs


As Illumina approaches its highs for the year, traders are looking for even more gains in the manufacturer of genetic-analysis systems.

More than 1,200 January 55 calls traded in a strong buying pattern on Friday with premiums rising from $2.40 to $3.50, according to optionMONSTER's Heat Seeker tracking system. The volume was above the strike's open interest of 972 contracts at the start of the session, indicating new activity.

ILMN rose 2.81 percent on Friday to close at $53.71, not far from its 52-week high of $55.39 reached on Jan. 25 when Roche offered $5.7 billion to buy the company. The stock plunged in mid-April when that hostile bid was withdrawn, but shares began to rebound in the summer.

Friday's long calls , which lock in the price where the stock can be purchased, are betting that ILMN will gain roughly 8 percent by mid-January. These options could be sold at a profit earlier if the stock rallies before then, but they will expire worthless if the shares don't rise. (See our Education section)

Total option volume in the name was 6 times its daily average, with calls outnumbering puts by a bullish 38 to 1.

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