Traders pin hopes on new Keryx drug

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Traders are turning bullish on Keryx Biopharmaceuticals, apparently looking for positive results on a new drug.

About 1,500 January 3.50 calls traded in a strong buying pattern on Wednesday, almost all of them going for $0.45, according to optionMONSTER's Heat Seeker tracking system. The volume was more than 5 times the strike's open interest at the beginning of the day, indicating new activity.

The long calls are looking for KERX to gain roughly 38 percent by expiration in mid-January. The company plans to release Phase III trial results for Zerenex, a treatment for kidney disease, in coming weeks. (See our Education section)

KERX rose 7.92 percent to close at $2.86 on Wednesday, breaking above its 50-day moving average. Shares have been trying to recover since gapping from about $5 to below $2 in early April after Keryx reported disappointing data on a colon-cancer drug.

Overall option volume in the name was 3 times its daily average in the last month. Only 116 puts traded in the entire session, a reflection of the bullish sentiment.

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