Unusual call action in Rockwell Medical

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Call trading dominates the unusual option trade in Rockwell Medical as its shares see wild volatility.

A trader bought 5,000 May 7.50 calls for $1 in volume that was below the strike's open interest of more than 10,000 contracts. Forty minutes later, the same number of August 7.50 calls were sold for $1 against open interest of just 11 contracts, indicating that this is a new position.

These trades could be independent of one another, given the time gap, but the size and volume suggests that this is a short calendar spread that would profit if shares move sharply in one direction or the other. But it could also be a simple short-call roll, with the trader buying back the May contracts and selling those in August. (See our Education section)

RMTI is up 3.72 percent to $6.69. The bioppharmaceutical stock was above $8 this morning but has been giving up ground since. The stock now sits in the middle of its recent range, as it was down at $5.18 in mid-November and up near $8.50 a month later.

Today's call trading made up almost all of the action in RMTI, which has seen more than 11,400 options change hands so far today compared to a full-session average of 711 contracts.

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