Vertex Pharmaceuticals is drawing bullish option activity ahead of its earnings report tomorrow afternoon.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 1,200 February 100 calls for $3.20 and the sale of 1,200 February 110 calls for $0.70 yesterday. Volume was far above the open interest in both strikes, showing that these are new positions.
This vertical spread cost a net $2.50 to open and is looking for VRTX to rally above $100 by expiration in mid-February. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $110
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VRTX fell 2.73 percent to $92.12 yesterday and is down 21 percent in the last month. The drug developer's next quarterly report is scheduled to come out after the close on Jan. 27.
Overall option volume in the name was 4 times greater than average yesterday. Calls outnumbered puts by a bullish 47-to-1 ratio.
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