Cepheid has started to move, and one big investor thinks it will keep on going.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,000 December 50 calls for $1.20 and the sale of an equal number of September 40 calls for $3.50. Volume was below open interest in the nearer-dated strike, which suggests that an existing long-call position was rolled forward and to a higher strike.
Making the adjustment resulted in a credit of $2.30 and provided the investor with an addition three months of upside exposure in the maker of genetic-testing equipment. It also protected him or her from a short-term pullback by lowering the delta . (See our Education section)
CPHD fell 0.62 percent to $43.40 on Friday but is up 15 percent in the last month. The stock gapped lower on a poor earnings report in July, double-bottomed near $37, and has been working higher since.
Total option volume in Cepheid was 11 times greater than average in the session, with calls outnumbering puts by a highly bullish 255-to-1 ratio.
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