Call Buyers Take Aim at Surging Novo Nordisk A/S (NVO)

Novo Nordisk A/S (ADR) (NVO) is seeing tons of action at the 55 strike

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Published on Mar 26, 2015 at 2:14 PM
Updated on Apr 20, 2015 at 5:09 PM

Novo Nordisk A/S (ADR) (NYSE:NVO) is ripping it up today -- tacking on 6.5% to trade at $53.06, and fresh off a record high of $53.75. Powering shares of the pharmaceutical firm is an announcement that its novoeight hemophilia A treatment will be launched in the U.S. by mid-April. Not surprisingly, options traders are gravitating toward calls over puts, while the stock's 30-day at-the-money implied volatility hit a 52-week peak of 36.7% earlier.

Diving right in, speculators are paying close attention to the 55 strike. Specifically, it looks like there may be buy-to-open activity transpiring at NVO's April and May 55 calls. The call buyers anticipate the shares will topple the $55 mark by the respective expiration dates, territory yet to be charted by NVO.

History shows long calls have been preferred over puts recently. During the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NVO has racked up a call/put volume ratio of 10.22 -- just 1 percentage point shy of a 12-month high.

This isn't entirely unexpected, given the technical tenacity of Novo Nordisk A/S (NYSE:NVO). Year-to-date, the shares have advanced 25%. Even more impressively, since hitting a recent low of $41.87 in early February, NVO has shot 26.7% higher.

Daily Chart of NVO since February 2015


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