bluebird bio, Inc. (BLUE) Trader Aims for Higher Highs

bluebird bio Inc (BLUE) reached a record high of $168.05 earlier

by Alex Eppstein

Published on May 8, 2015 at 2:05 PM
Updated on May 8, 2015 at 2:05 PM

Over the last 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), bluebird bio Inc (NASDAQ:BLUE) puts have been the options of choice among speculators. The biotech issue has racked up a put/call volume ratio of 1.10, which outstrips 95% of comparable readings from the past year. In other words, traders have bought to open puts over calls more quickly just 5% of the time in the previous 52 weeks.

However, on the heels of BLUE's new record high of $168.05 -- touched shortly after the open -- calls are in focus this afternoon. By the numbers, over 4,700 calls are on the tape -- seven times what's expected at this point in the day, and almost four times the number of puts.

The June series is seeing notable attention. From the looks of it, one trader bought to open 1,200 June 170 calls, and simultaneously sold to open 1,200 June 220 calls -- expecting BLUE to rally to $220 (uncharted territory) by the close on Friday, June 19, when the options expire. At the same time those lots were exchanged, a block of 400 in-the-money June 110 calls may have been sold to close -- suggesting they could be related to the bull call spread.

Technically speaking, bluebird bio Inc (NASDAQ:BLUE) has been a beast. On a year-over-year basis, the stock has surged 769%, and was last seen 4% higher at $158.50.

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