Call Traders Jump on Valeant Stock After Bloomberg Report

Valeant weekly call options are popular today

Jun 6, 2017 at 10:54 AM
facebook twitter linkedin

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares are trading 2% higher today at $12.59, after Bloomberg reported the company is in talks to sell Bausch & Lomb's eye-surgery business. Options traders have been quick to respond, with buy-to-open activity possibly taking place at the weekly 6/9 13-strike call, and the June 14 call. If long positions are being initiated here, traders are betting VRX stock will topple the strikes before the options' respective expirations at this Friday's close, and the close on Friday, June 16. 

Call buying has been the norm on Valeant stock for some time. In fact, the shares have a 50-day call/put volume ratio of 2.82 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which is an annual high. 

But no matter if it's calls or puts you're targeting, it's a good time to buy premium on VRX. This is according to the equity's Schaeffer's Volatility Index (SVI) of 54%, which is just 10 percentage points from an annual low -- hinting at unusually low volatility expectations being priced into near-term options. Plus, Valeant has a Schaeffer's Volatility Scorecard (SVS) of 89, showing it's regularly exceeded options traders' volatility expectations during the past year. 

Turning back to the charts, VRX shares have bounced back since bottoming at an eight-year low near $8.30 back on April 24. More recently, Valeant stock has been trading around its flattening 100-day moving average, and has trimmed its year-to-date deficit to 13%.

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners