Huge Block of Calls Bought on Merck (MRK)
Huge Block of Calls Bought on Merck (MRK)
Shares of Merck & Co. (MRK) are trading higher on the session, currently up by 0.51%, at $43.47. The stock has been moving higher since early June, touching a three-year high of $45.17 on July 27th.
With shares consolidating and now testing the 50-day moving average, one options trader is taking the opportunity to buy upside calls on Merck, betting that they will drive to new highs into the New Year.
A short while ago, the January 2013 $48.00 call was purchased 12,000 times, on the offer, for $0.30. Given the open interest of 2,062 contracts, this is clearly new positioning. Volume has since risen to over 17,700 contracts, making it the heaviest traded MRK option, as well as one of the top ten most active options today.
Overall implied and historical volatility is currently registering 15% and 11%, respectively. At $0.30, the Jan13 $48 call traded at 15.5% vol, indicating that the trader paid a fair price to enter into the net long position.
Merck & Co., Inc. is a global health care company that delivers health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products, which it markets directly and through its joint ventures.
About The Options Insider
Compiled by The Options Insider staff.
View The Options Insider's post archive >
