Biopharmaceutical companies have been hit hard, but traders are betting on gains in Quintiles IMS early in 2017.
Our monitoring systems detected the purchase of 5,000 February 80 calls for $1.30 and $1.35 at the same second on Friday. Open interest in the strike was only 115 contracts before the trade occurred, showing that it is a new position.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
Q rose 0.22 percent to $76.05 on Friday but is down 6 percent in the last month. The outsourcing company, which provides a broad array of services to biopharmaceutical firms, is expected to report earnings in pre-market hours on Feb. 9.
Overall option volume was 362 times greater than average in the name on Friday. Calls outnumbered puts by a bullish 2,536-to-1 ratio.
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