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Call buyer bets on strong rally in Shire

Mike Yamamoto (mike.yamamoto@optionmonster.com)

One trader is looking for a big rally in Irish pharmaceutical company Shire.

optionMONSTER's Heat Seeker system detected the purchase of 3,000 October 125 calls in one print for $0.90, above the ask price at the time. The volume is 100 times higher than the strike's open interest of just 30 contracts, showing that this is a new position.

SHPG is off fractionally at $98.80 in afternoon trading. The Dublin-based company gapped down after its last earnings report at the beginning of May but then bounced sharply at the $86 level. The stock hit resistance at the $100 level last week and has pulled back in recent days.

Today's call buyer is looking for SHPG to surge above $125.90 by mid-October, more than 27 percent higher than current levels. Those contracts will will expire worthless if the shares remain below $125. (See our Education section)

These calls made up almost all the option volume in the name, which is more than 10 times its daily average for the last month. No puts have changed hands in the session, a further indication of the bullish sentiment.

The company is scheduled to present at the Goldman Sachs Annual Global Healthcare Conference on June 12. It will release second-quarter results on July 25. 

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