Call Buyers Blitz Rallying bluebird bio, Inc. (BLUE)

bluebird bio Inc (BLUE) calls stay hot as the biotech assails record heights

Mar 11, 2015 at 1:22 PM
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Biotech concern bluebird bio Inc (NASDAQ:BLUE) is continuing its assault on the charts, up 1.4% at $118.75. In fact, the shares earlier notched an all-time best of $122.70. Against this backdrop, BLUE bulls are active in the options arena, with calls trading at twice the average intraday clip.

Most popular is the April 110 call, which traders are buying to open to gamble on an extended journey north of $110 through the next five weeks. The volume-weighted average price (VWAP) of the call is $17.75, meaning the buyers will profit if BLUE topples $127.75 (strike plus VWAP) -- in uncharted territory -- by the close on Friday, April 17, when back-month options expire.

Today's bullish campaign is nothing new for BLUE speculators. Option traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open nearly 1.5 calls for every put during the past two weeks.

On the charts, bluebird bio Inc (NASDAQ:BLUE) has been a monster, more than quadrupling over the past year. More recently, the shares have outperformed the broader S&P 500 Index (SPX) by 35 percentage points during the past month, bringing the stock's 14-day Relative Strength Index (RSI) to 81 -- in overbought territory, suggesting a breather could be in the short-term cards.

Daily Chart of BLUE since March 2014

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