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What's behind big call activity in Cerus

Chris McKhann (chris.mckhann@optionmonster.com)

Cerus is seeing heavy call activity today, but it isn't wildly bullish.

CERS is up 0.92 percent at $3.29 in midday trading. The medical-products company bounced off support at $3 several times in the last month but has been generally trending lower from a 52-week high of $4.53 reached in late March.

Average option volume in CERS has been a mere 12 contracts a day in the last month, but our systems detected 5,240 February 5 calls trading this morning.

A trader sold those calls for $0.20 on a very wide bid/ask spread of $0.20/$0.50. There was no open interest at that strike, and the total open interest for all strikes is just 8,596.

The calls were not sold against any trading in the underlying stock that we saw today. As a matter of fact, the total stock volume is just under 30,000 shares, while the options trade confers the obligation to sell to 524,000 shares of the stock.

Today's calls may have been sold naked with an initial bearish bias or against an existing long stock position in a covered call position, which would be bullish up to the strike. (See our Education section)

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