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Unusual Options Activity

Published on April 10, 2007

Unusual Options Activity

April 10, 2007

Here it came, it flew, it made me nervous, it again flew and flew again. Have you also felt same monitoring DNDN? I first noticed this in Kingsland report and also when analyzing AGIX. It had spectacular ride. Amidst biotech conference, it seems that traders are now cautious. There was heavy volume in DNDN yesterday across all the strikes and of course both sides i.e. call and put. It started to gain momentum from the time AGIX tanked. Is it is a good time to get into DNDN, not sure? A final decision from U.S. regulators on Provenge is expected by May 15 though.

 

However, there is something else interesting brewing up and that is NUVO. It saw very heavy volume around $5 and $7.5 strikes yesterday. Interesting strike was $7.5, 3004 contracts traded vs. 387 open interests. NUVO rose 52% amidst biotech conference. The small biotech group said it plans to present data from animal studies for its NU206 drug candidate at a scientific meeting of the American Association for Cancer Research on Saturday, April 14. Nuvelo has been testing the compound for a variety of applications, including cancer and inflammatory bowel disease. For those who are new to NUVO, this was trading roughly at $21 till the beginning of this year. Sure though, IV will rise till this Friday. I might get into this but shall trade very carefully.

nuvo.png    dndn-april-10-07.png

Other sector that is heating-up is coal. OptionMonster had mentioned last week that ANR, CNX and BTU have seen unusual activity that has seen ticker shooting for the moon. The key reason for this rise is attributed to a possible buyout by Arch Coal (ACI).

On the bearish side, interesting ticker is Dollar General (DG) that saw heavy trading for $20 put for May and Aug. Confusing thing is that there is heavy open interest on 20 and 17.5 for Aug (roughly 23K each) but volume was roughly 10K for Aug and 10K for May (vs open interest of only 970 for May). Something bearish is brewing here, but I shall research this one a bit more before diving in.

dg-april-10.png

Stay tuned, profitable trading, OptionPundit

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