Bristol-Myers Squibb Company (BMY) Dip Doesn't Deter Option Bulls

April calls are popular among Bristol-Myers Squibb Co (BMY) options traders

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Published on Apr 13, 2015 at 1:54 PM
Updated on Apr 20, 2015 at 5:32 PM

Since hitting a 14-year high $69.20 on March 20, Bristol-Myers Squibb Co (NYSE:BMY) has dropped 7%, recently consolidating above its 60-day moving average. Today, the shares have seen both sides of breakeven, but were 0.5% lower at $64.34 at last glance. Options bulls aren't paying much mind to today's price action, with calls crossing at almost triple the normal intraday pace.

Daily Chart of BMY since January 2015

BMY's three most popular contracts are in the April series, meaning they expire this Friday evening. Specifically, the top strikes are the 65, 65.50, and 66.50 calls, and all three appear to be seeing buy-to-open action, as speculators expect the shares to bounce back from today's dip to topple the respective strikes by week's end.

This call buying is just more of the same from BMY's options traders. Looking at data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 4.82 is only 2 percentage points from an annual bullish extreme.

By contrast, the analyst community isn't so sure of Bristol-Myers Squibb Co (NYSE:BMY). While eight brokerage firms say the equity is a "strong buy," eight others deem it a "hold" or worse. Plus, BMY's average 12-month price target of $65.90 sits in-line with current trading levels.


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