Option Volumes Soars Amid Opko Health Inc. (OPK) Breakout

Opko Health Inc. is up 9%, thanks to a licensing deal with Pfizer Inc.

Digital Content Group
Dec 15, 2014 at 1:48 PM
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Opko Health Inc. (NYSE:OPK) has surged roughly 9% to trade at $8.92, after striking a nearly $300 million drug-licensing deal with Pfizer Inc. (NYSE:PFE). Option traders have taken notice, too, as intraday volume is running at nearly triple the expected rate -- with possible buy-to-open activity at the January 2015 9-strike call.

Today's bullish gap has OPK trading above its year-to-date breakeven mark of $8.44, as well as several key trendlines. Specifically, the shares have broken north of their 80-, 160-, and 200-day moving averages, which have acted as levels of resistance in recent months. In fact, the last time the stock closed atop this trio of trendlines was Aug. 19.

Short-covering activity may be helping to fuel Opko Health Inc.'s (NYSE:OPK) intraday gains. More than one-fifth of the equity's float is dedicated to short interest, and it would take around six weeks to buy back these bearish bets, at OPK's average daily trading volume.

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