Are Celgene Corporation (CELG) Option Traders Changing Their Tune?

Celgene Corporation (CELG) is muscling higher, sparking a rare wave of call buying

by Andrea Kramer

Published on Mar 16, 2015 at 10:52 AM
Updated on Apr 20, 2015 at 5:32 PM

Biotech stocks are mostly higher this morning, and Celgene Corporation (NASDAQ:CELG) is no exception. The stock -- which will join the S&P 500 Index (SPX) after the close on Friday -- is up 1.7% at $119.77, and option traders are gambling on even more short-term upside for the equity.

Intraday call volume is running at nearly twice the average clip, and has outpaced CELG put volume by a margin of roughly 5-to-1. Possible buy-to-open activity has been detected at the March 120 call, as speculators bet on CELG to muscle north of $120 through the end of the week, which represents the front-month contracts' life span. In light of CELG's ascent today, delta on the call has jumped to 0.47 from 0.33 at Friday's close, implying a near 1-in-2 shot of the option expiring in the money.

Today's appetite for CELG's short-term calls marks a change of pace for the equity. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.35 sits just 6 percentage points from an annual peak, suggesting near-term traders have rarely been more put-biased during the past year.

On the charts, Celgene Corporation (NASDAQ:CELG) is 6.8% higher year-to-date, and since touching a record high of $125.45 in late February, has pulled back to test the waters atop its 60-day moving average. This trendline has contained CELG's dips in 2015, and could continue to serve as support.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.
Stocks Surge During Holiday-Shortened Week
Stocks chugged higher as the government responded to the coronavirus crisis with more funding
Bank Stocks Ease Investors Back Into Earnings Season
Bank stocks will kick off earnings season next week
The Top Lithium Play of 2020
Click to continue to advertiser's site.