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Biotech stock Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN - 6.69) drew a heavy dose of call volume on Monday, with more than 4,200 of these bullishly oriented contracts crossing the tape during the course of the session. For comparison's sake, the average daily call activity for ACHN is just 324 contracts.
Taking a closer look, one single speculator was responsible for most of the action. Just after midday, a block of 3,000 September 7.50 calls traded at the ask price of $0.35, while a block of 1,000 September 5 calls simultaneously crossed near the bid price at $1.75. Open interest at the September 7.50 call jumped overnight by 3,049 contracts, while the September 5 call lost exactly 1,000 contracts. In other words, it looks as though this trader rolled his ACHN calls up to a higher strike, while also boosting the size of his speculative bet.
Essentially, this call player is looking for a continued climb by ACHN through September expiration. The stock has enjoyed a healthy bounce from its low near $5.50 earlier this month, but the $7.00-$7.50 area has served as a technical ceiling since late April. Plus, the shares now appear to be finding resistance at their 100-day moving average, located at $6.83.