Traders look for rebound in Vivus
Traders are looking for a pop in shares of Vivus in coming months.
More than 2,700 October 5 calls traded in a strong buying pattern for $0.14 to $0.18 yesterday, according to optionMONSTER's Heat Seeker tracking system. Volume was well above the strike's previous open interest, indicating that these are new positions.
Long calls lock in the price where the stock can be purchased through mid-October no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $5. (See our Education section)
VVUS slipped 0.71 percent yesterday to close at $4.17. The biopharmaceutical firm, which specializes in anti-obesity drugs, has lost more than 50 percent of its market value this year.
Yesterday's total option volume in Vivus was nearly 6 times its daily average for the last month. Overall calls outpaced puts by more than 3 to 1.
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