Arrowhead Research Corporation (ARWR) Speculators Eye the $8 Level

Option volume is heavy today on Arrowhead Research Corp (NASDAQ:ARWR), relatively speaking. The under-the-radar stock typically sees fewer than 2,500 calls and puts change hands during an average session -- but already today, more than 1,300 calls and 679 puts have been traded on this biopharmaceutical name.

It's the second straight day of heavier-than-usual option activity for ARWR, as volume jumped to seven times the norm in Tuesday's session. Yesterday's most popular option was the January 2015 8-strike call, with 2,184 contracts exchanged -- many of which were bought to open.

With ARWR off 1.3% at $7.47 this morning, those short-term calls are out of the money by a slim margin. However, the stock traded as high as $8.55 yesterday, bolstered by reports of a possible acquisition offer from Gilead Sciences, Inc. (NASDAQ:GILD).

Yesterday marked the first trip north of $8 for Arrowhead Research Corp (NASDAQ:ARWR) since early October, and it's possible that the sudden interest in short-term 8-strike calls wasn't necessarily bullish. Short interest accounts for 31.5% of the stock's float, so bearish bettors may have been purchasing calls to hedge against a potential buyout-related pop over the next two weeks until expiration.