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Supernus rebounds with call buying

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Supernus Pharmaceuticals ended last week with a bounce, and one trader is looking for modest gains by autumn.

optionMONSTER's Heat Seeker system shows that 3,050 September 4 calls were bought in less than 4 minutes for $1.10. This is clearly a new position, as there was no open interest in the strike before the trades appeared.

SUPN rose 9.76 percent on Friday to $4.95 after ending the previous session at $4.51, its lowest close since going public in May 2012. The drug developer had run up to $16.68 in July but plunged from above $7 to the $5 level last month after its last quarterly report.

Friday's long calls , which lock in the purchase price for the stock no matter how high it might rise, are looking for SUPN to rally above $5.10 by mid-September. These contracts will track the shares closely because they are already in the money and will expire worthless if the stock falls below the $4 strike price. (See our Education section)

Total option volume in the name surpassed 4,900 contracts, compared with a daily average of just 386 in the last month. Overall calls outnumbered puts by nearly 8 to 1, a reflection of the session's bullish sentiment.

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