Bulls Bet on a Breakout for bluebird bio Inc (BLUE)

bluebird bio Inc options traders loaded up on 40-strike calls

by Elizabeth Harrow

Published on Oct 21, 2014 at 10:52 AM
Updated on Jun 24, 2020 at 10:16 AM

Biotech stock bluebird bio Inc (NASDAQ:BLUE) typically flies under the radar with options traders. On an average day, only 330 total puts and calls change hands on BLUE. However, the stock's call options saw a relative spike in interest yesterday, with 1,146 contracts exchanged during the course of the session.

The most active BLUE strike was the November 40 call, with 764 contracts crossing the tape. The majority of these front-month bets traded at the ask price, implied volatility at the strike rose 5.2 percentage points by the close, and 623 of these calls translated into new open interest overnight -- so it's safe to assume options traders were buying to open new bullish bets on BLUE yesterday.

Shares of bluebird bio Inc (NASDAQ:BLUE) have rallied nearly 80% year-to-date, including today's 2.4% gain, to trade at $37.69. By purchasing the November 40 calls, speculative players are betting on BLUE to break out above this looming round number over the next month. Back in mid-June, the stock tagged an all-time high of $41.75 -- but in the months since, BLUE's positive momentum has consistently fizzled around the $38-$40 neighborhood.


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