Trader bets on limit to Allergan upside

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Botox maker Allergan have rebounded since its earnings report this week, but one trader sees a limit to further gains.

A trader sold 3,400 December 95 calls for $1.15, according to optionMONSTER's tracking systems. The previous open interest was just 97 contracts, so this is a new position.

The options were likely sold against an existing long position in the stock in a covered call trade. This strategy would be bullish up to the $95 strike price but not beyond, as it gives up any upside in the shares beyond that level. (See our Education section)

AGN is up 1.21 percent to $91.88 this morning. The stock dipped near $86 on Wednesday after the quarterly results but quickly recovered. Shares were up above $95 three weeks ago.

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