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Qiagen sees rare bullish activity

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Qiagen rarely sees much option activity, but traders were snapping up calls in the pharmaceutical-testing company at the end of last week.

optionMONSTER's Heat Seeker system detected the purchase of 5,855 August 25 calls for $0.80 to $1.45 on Friday. This clearly represents fresh buying, as previous open interest in the strike was a mere 292 contracts.

These long calls lock in the price where the stock can be purchased through mid-August no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts could lose value if shares stall or pull back. (See our Education section)

QGEN gained 2.27 percent on Friday to close at $24.80. That was the Dutch company's highest close since July 2001, having encountered resistance at the $24 level on several instances in that time. Its next earnings report is scheduled for July 29.

Total option volume in QGEN reached 6,687 on Friday, compared to a daily average of just 4 contracts for the last month. Overall calls outnumbered puts by more than 25 to 1.

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