Mylan Inc. (MYL) Option Bulls Make a Rare Appearance

Mylan Inc (MYL) calls are trading at 21 times the average intraday pace

by Karee Venema

Published on Mar 11, 2015 at 10:42 AM
Updated on Jun 24, 2020 at 10:16 AM

It's another big day for drugmakers, and sector component Mylan Inc (NASDAQ:MYL) is no exception. The stock is up 6.3% at $58.76 -- and back in the black on a year-to-date basis -- after the company launched intermediate-strength dosages of its Fentanyl Transdermal System, a treatment used to ease chronic pain. In the options pits, call volume has soared to 21 times what's typically seen at this point in the day. Traders are showing particular attention to the equity's short-term contracts, per its 30-day at-the-money implied volatility, which has soared 24.7% to 34.8%.

Most active are MYL's March 55, 57.50, and 60 calls, where it appears a number of new positions are being purchased. By buying to open the calls, traders expect MYL to settle north of the respective strikes -- and potentially in record-high territory -- at next Friday's close, when front-month options expire.

Widening the sentiment scope reveals today's accelerated call activity runs counter to the withstanding trend. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MYL's 10-day put/call volume ratio of 0.37 rests in the 75th annual percentile. In other words, puts have been bought to open over calls at a faster-than-usual clip in recent weeks.

Outside of the options pits, sentiment is more upbeat. Of the 12 analysts covering the shares, 11 maintain a "buy" or better, versus one that has levied a lukewarm "hold" rating toward MYL. Meanwhile, the consensus 12-month price target of $61.47 stands in territory yet to be charted by Mylan Inc (NASDAQ:MYL).


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