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It has been a volatile time for Bristol-Myers Squibb Co. (NYSE: BMY), by the 40-day historical 60-day share price volatility, which is in the 90th percentile annual. Today, an options trader seems to be going a long way, betting on the continuation of this fierce price action to continue in the short term.
More recently, about 150,000 calls and 98,000 put options had changed hands on the BMY stock, which is five times more than usual at this point in the session. The call and put of the month of March 57.50 are the most active, and it is possible for a speculator to launch a long ride for an initial cash outflow of $ 39.8 million (70,000 contracts *, $ 5.69 premium paid per spread * 100 shares per contract).
This also represents the maximum loss on the trade, if the BMY sits near the strike at the expiration of the options the previous month at the close on Friday, March 15 at the close, the profit will start to s & # 39; Accumulate if the security falls to the breakeven point of $ 63.19 (strike plus net debit), or reaches the lower break-even point of $ 51.81 (strike minus net debit).
More generally, speculative players have bought to open put options for faster than usual calls in recent weeks. At the International Securities Exchange (ISE), the Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), Bristol-Myers' 10-day buy / sell option ratio Squibb is in the 89th annual percentile.
On the charts, the title has been gaining popularity since January 44 (44.30), its lowest level in five years, an increase of 18.75%. BMY shares climbed 1.4% yesterday on news. Major shareholders were skeptical about Celgene's proposed takeover bid by the drug's manufacturer. And thanks to the 1.8% gain recorded today by Bristol-Myers Squibb at $ 52.58, security is about to close north of its 100-day moving average for the first time since October 17.
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