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One trader is upping the bullish ante on Array Biopharma Inc (ARRY)
Array Biopharma Inc (NASDAQ:ARRY) hit a six-year high of $7.58 earlier, thanks to news it has acquired the rights to experimental cancer drug encorafenib from Novartis AG (ADR) (NYSE:NVS). ARRY was last seen 37% higher at $6.91, and activity has picked up in its options pits, with contracts crossing at 34 times the typical intraday rate.
Taking a closer look, calls have outnumbered puts by a margin of nearly 2-to-1. Much of this activity may be due to one trader who appears to have upped the bullish ante by liquidating her now in-the-money June 5 calls, in order to buy to open the June 7 contracts. This trader expects ARRY to hit even higher highs north of $7 by the close on Friday, June 19, when the monthly series expires.
According to the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.25, near-term options traders are more call-skewed than at any point in the past year. Though, with over 19% of ARRY's float sold short -- representing over two weeks' worth of buying pressure, at the stock's average daily volume -- some of those calls may have been bought by bears hedging their bets.
On the analyst front, Array Biopharma Inc (NASDAQ:ARRY) is surrounded by optimism. All six covering brokerage firms rate the equity a "strong buy," presumably impressed by its technical strength of late. ARRY has outperformed the S&P 500 Index (SPX) by 34.5 percentage points in the past three months, and thanks to today's pop, is safely north of recent congestion in the $5 region.