Why trader is selling Halozyme calls
Halozyme Therapeutics has been soaring, but one trader apparently believes that further gains will be limited.
Our scanners show that 3,838 February 13 calls were sold for $0.90 to $0.95 at the same second yesterday. This is clearly a new position, as open interest in the strike was just 249 contracts before the trade occurred.
Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)
HALO fell 9.73 percent to $14.24 yesterday but is up 44 percent in the last week. The biotechnology firm is expected to report earnings after the close on Feb. 27.
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