Why trader is selling calls in Navidea

optionMONSTER

Navidea Biopharmaceuticals has been climbing for months, but one trader apparently believes that further upside will be limited.

A trader sold 5,000 July 4 calls in less than a minute yesterday for the bid price of $0.40, according to optionMONSTER's tracking systems. The strike's open interest was just 557 before the trading began, clearly showing that this is a new position.

The calls weren't traded against any stock that we saw yesterday, so it could be naked selling with an initial bearish bias. Alternatively, the trader could be selling the options against an existing long position in a covered call position, which would be bullish up to the strike price but not beyond. (See our Education section)

NAVB rose 3.46 percent to $3.29 yesterday, continuing to run higher from its 52-week low of $2.14 set in mid-November. Shares were up at a 52-week high of $4.77 in July.

Total option volume in the name was 7,601, compared to a daily average of 1,055.

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