Endo Pharmaceuticals has been rallying, and one bull wants to stay on board.
optionMONSTER's Heat Seeker tracking system detected the purchase of 2,000 March 35 calls for $3 and the sale of an equal number of February 35 calls for $1.60. Volume was below open interest in February but not March, which indicates that an existing long position was rolled from one contract to the other.
The trade cost $1.40 and gives the investor an additional month to profit from upside in the fast-growing drug maker.
ENDP rose 2.05 percent to $35.92 yesterday. It more than doubled between May 2010 and April 2011, pulled back sharply and then resumed climbing after a strong earnings report in October. The company, whose main growth driver has been the painkiller Opana, will release its next set of financials on Feb. 24.
Rolling the calls keeps the investor in the trade through the next release and avoids losing money to time decay on the February contracts, whose value will deflate at an accelerating pace as expiration approaches this Friday. (See our Education section)
Overall option volume in the stock was more than quadruple the daily average in the session, according to the Heat Seeker.
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