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Buyers target Immunomedics at highs

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Immunomedics spiked to its highest levels in more than three years on Friday, and traders are looking for even more gains in the drug developer's stock.

Nearly 2,000 July 5 calls traded in a strong buying pattern as premiums rose from $0.25 to $0.50, according to optionMONSTER's Heat Seeker tracking system. The volume was more than double the strike's open interest of 929 contracts before the session began, indicating that these are new positions.

The long calls lock in the price where traders can buy the stock in the next month no matter how high it might rise. But if IMMU is below the $5 strike price in mid-July, these contracts could expire worthless. (See our Education section)

IMMU surged 16.24 percent on Friday to finish the session at $5.01, its first close above $5 since September 2009. The biopharmaceutical company had been trading below $3 almost all year but began rising sharply last month on positive results in early testing of its treatment for colorectoral cancer.

Total volume in the name topped 6,400 contracts, 3.5 times its daily average for the last month. Calls outnumbered puts by more than 15 to 1, a reflection of the session's bullish sentiment.

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