Ventana Deal Boosts Halozyme Therapeutics Inc. (HALO), Lures Bulls

Halozyme Therapeutics, Inc. (NASDAQ:HALO) is fresh off a record high

Alex Eppstein
May 27, 2015 at 10:48 AM
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Halozyme Therapeutics, Inc. (NASDAQ:HALO) exploded out of the gate to a record high of $18.18, but was last seen 0.7% lower at $17.62. Boosting the shares is news HALO and Ventana Medical Systems will collaborate on a diagnostic test for the former's investigational cancer drug, PEGPH20. Traders, meanwhile, are storming HALO's options pits.

At last check, calls are running at triple the expected intraday rate. Buy-to-open activity is detected at the January 2016 25-strike call. By purchasing these deep out-of-the-money positions, traders believe HALO will surge past $25 -- and into new all-time-high territory -- by January 2016 expiration.

Option players have been buying to open the stock's calls over puts for some time now. During the last 50 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HALO has racked up a call/put volume ratio of 5.33 -- higher than 68% of comparable readings from the past year.

However, some of these upside bets may have been the work of short sellers attempting to hedge their bearish positions. After all, 17.5% of HALO's float is sold short, translating to more than 12 days' worth of trading activity, at typical volumes.

As alluded to, Halozyme Therapeutics, Inc. (NASDAQ:HALO) has been a technical beast. The shares have more than doubled in value over the past year, and have outperformed the broader S&P 500 Index (SPX) by 25.6 percentage points during the last 40 sessions.

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