An All-Time Peak Has Celgene Corporation (CELG) Bulls Biting

Celgene Corporation (CELG) topped out at $129.06 earlier -- its highest mark on record

by Karee Venema

Published on Mar 20, 2015 at 11:03 AM
Updated on Apr 20, 2015 at 5:32 PM

Similar to fellow drugmaker Biogen Idec Inc (NASDAQ:BIIB), Celgene Corporation (NASDAQ:CELG) hit its highest perch on record earlier. Specifically, the stock topped out at $129.06 -- and was last seen up 0.4% at $125.72 -- after Piper Jaffray boosted its price target on the shares by $9 to $144. In the equity's options pits, call volume has soared to four times what's typically seen at this point in the day, and it seems a number of traders are rolling the dice on even higher highs over the next four weeks.

Drilling down, CELG's April 125 call has seen the most action. It appears new positions are being purchased here -- a theory echoed by data from the International Securities Exchange (ISE) -- for a volume-weighted average price (VWAP) of $5.54. As such, at-expiration breakeven for today's call buyers is $130.54 (strike plus VWAP), or territory yet to be charted by the soon-to-be S&P 500 Index (SPX) component.

From a wider sentiment perspective, put players have been active in CELG's options arena in recent weeks. The stock's 10-day ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.62 ranks in the 66th annual percentile. Mirroring this put-heavy bias is CELG's Schaeffer's put/call open interest ratio (SOIR) of 1.40, which ranks 3 percentage points from a 52-week peak -- pointing to a distinct preference for puts over calls in the front three-months' series of options.

However, it could be that a portion of this put activity is protective in nature, considering shares of Celgene Corporation (NASDAQ:CELG) have rallied 74% over the past 52 weeks. In other words, shareholders could be initiating long puts to protect paper profits against an unexpected pullback.


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