IB Options Brief: Gilead Sciences, Inc. (GILD)
Bullish Options Build On Biotech Company Gilead Sciences
GILD ñ Gilead Sciences, Inc.
Bullish activity in the biotechnology companyís options jumped and shares in Gilead Sciences moved up more than 2.0% to $46.18 the same day the drug maker presented at the 2012 RBC Capital Marketsí Healthcare Conference in New York. Positive comments from management along with the impending April 19th first-quarter earnings report from the Company could be catalysts for the sizable bull call spreads accumulating in the April expiry.
It looks like one investor purchased a roughly 15,000-lot April $47/$50 call spread for a net premium of $1.13 per contract to position for shares to extend gains during the next couple of months. Profits may be available on the spread in the event that Gileadís shares rally another 4.2% to surpass the average breakeven price of $48.13, while maximum possible profits of $1.87 per contract pad the investorís wallet should the stock surge 8.3% to top $50.00 at expiration.
Gileadís shares had realized year-to-date gains of 35.0% earlier this month after the Companyís better-than-expected fourth-quarter earnings report sent the stock up as high as $56.50 on the 6th of February. The stock subsequently came back down with a thud shortly after reaching its highest level since 2008, but the options trader responsible for the call activity this morning is poised to benefit should the stock regain its footing in the near term.
Note: The material presented in this commentary is provided forinformational purposes only and is based upon information that isconsidered to be reliable. However, neither Interactive Brokers LLC norits affiliates warrant its completeness, accuracy or adequacy and itshould not be relied upon as such. Neither IB nor its affiliates areresponsible for any errors or omissions or for results obtained from theuse of this information. Past performance is not necessarily indicativeof future results.
This material is not intended as an offer or solicitation for thepurchase or sale of any security or other financial instrument.Securities or other financial instruments mentioned in this material arenot suitable for all investors. Any opinions expressed herein are givenin good faith, are subject to change without notice, and are onlycorrect as of the stated date of their issue. The information containedherein does not constitute advice on the tax consequences of making anyparticular investment decision. This material does not take into accountyour particular investment objectives, financial situations or needsand is not intended as a recommendation to you of any particularsecurities, financial instruments or strategies. Before investing, youshould consider whether it is suitable for your particular circumstancesand, as necessary, seek professional advice.
View Caitlin Duffy's post archive >