Orexigen Therapeutics, Inc. (OREX) is a California based pharmaceutical manufacturer specializing in obesity related medications. At the time of this post (11:05AM CST), OREX is currently trading at 9.31, up a massive 60.79% on the day after earlier news broke regarding positive results from early testing of the company’s Contrave weight loss drug. The stock continues to press fresh 52 week highs on the session thanks to today’s well-received news, and the current 52 week trading range in OREX currently sits at 3.11-9.37.
Earlier this morning beginning around 9:11AM CST, OptionHacker detected and flagged some unusually bullish options activity in OREX as a trader came in and purchased two separate lots of 1,000 contracts of the Mar ’15 9.0 strike calls for 0.15 and later for 0.20, lifting the offer across multiple exchanges on both occasions. The stock had just broken above 7.00 intraday resistance at the time this trader’s purchase was made, and has since surged over two full points higher to new highs over 9.30. This timely long call position has accordingly profited immediately from the strength of today’s move, with this option already printing as high as 1.00 in the early session. With an initial cash outlay of approximately $35,000 before commission costs, this trader has already seen several hundred percentage point gains on this position, making this trade a blowout winner in a matter of just hours. We will continue to monitor this position for upside into the March monthly options expiration approximately 17 days away.
Trade: A trader bought 2,000 OREX Mar 9 Calls for $0.175 on average.
Risk: $17.50 per 1 lot
Reward: Unlimited
Breakveven: $9.175
The stock absolutely exploded to the upside since these calls hit the tape this morning. These calls ripped with the stock and have already traded as high as $1.00 on the day making this trade an absolute blowout winner.
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